Jump to content
House Price Crash Forum
BLOW FLY

The Future.... What Happens When All The Priced Out Grow Old?

Recommended Posts

Something I've been pondering for a while and have come to a variety of thoughts and conclusions but I thought I'd pose the question here to see what everyone else's thoughts might be.

So hypothetically say things continue as they are and successive governments, BoE and financial institutions etc manage to keep the plates spinning and house prices rising steadily for the next 30 years?

What will happen to all those people that have been priced out of the housing market but been paying large percentage of their income all their life to some BTLr or housing institution?

They now retire, have no savings, maybe no pension or house equity to show of because it's all been swallowed in rent and living expenses.

That's one huge benefits bill that's going to have to be paid out, if of course there is still a welfare state. I just can't really see any solution to this.

BF

Share this post


Link to post
Share on other sites

I have too. Work place pension scheme is one tool i think they hope will reduce state dependancy in 30-40 years time.

They are rampently pushing home ownership with all the props, and i think they will only remove them when sentiment of the general public changes to being against home ownership.

Share this post


Link to post
Share on other sites

I have too. Work place pension scheme is one tool i think they hope will reduce state dependancy in 30-40 years time.

Pi55ing in the wind though isn't it, unless you can afford to stash >30% of your monthly take home income...

Another consequence of high living/housing low wage economy. Wealth creators again leaving the state to foot the short falls.

Share this post


Link to post
Share on other sites

Logans run probably.

I think I've posted (a few) threads on the subject eons back, no-one really knows. There are small pockets of sentiment change (but no regime change) in some people now who have their kids at home that are thirties or forties that can see what damage it's causing (esp. if expecting grandkids).

An interesting angle for me (related to the children part) is how to continue to enforce this on the population, if you price out those that are there to protect the sytem (army, police etc.) then there will be a problem. Tip - go long on drone companies!

Share this post


Link to post
Share on other sites

Pi55ing in the wind though isn't it, unless you can afford to stash >30% of your monthly take home income...

State pension is a huge welfare expense though and is only growing hence the rising retirement ages.

What's stopping the state making a workplace pension mandatory & scrapping or severely reducing the state pension?

Share this post


Link to post
Share on other sites

Assuming that the current generation of renters remain renters for life, the quick upshot is that housing benefit becomes unaffordable - how that becomes rationed will be very interesting indeed. Realistically a lot of people may find themselves working until they drop out of necessity. However things play out its hard to avoid the conclusion that many will have much lower standards of living than previous generations. I fear for how my grandchildren will get on in the future as life will get harder for them.

Share this post


Link to post
Share on other sites

State pension is a huge welfare expense though and is only growing hence the rising retirement ages.

What's stopping the state making a workplace pension mandatory & scrapping or severely reducing the state pension?

Realistically nothing and we're already moving in that direction - the problem is that if people have to pay rents out of their pensions, their rents are going to be unaffordable in most cases. As things stand the average pension pot on retirement is all of £38,000 (according to the Guardian if memory serves) - that isn't going to pay much rent in retirement (or anything else for that matter). While that figure may well not be 100% accurate - it does show that most people are saving nowhere near enough for retirement.

Share this post


Link to post
Share on other sites

Living standards are already much lower than previous generations. I'm 32 and I live like a student. Had I been born twenty years earlier I would have had my own place by now.

The current generation of near-pensioners didn't save enough - why else is their property their pension? And renters like me have spent their whole working lives building up someone else's 'pension pot' of equity, left with very little to save for ourselves.

Either the government will keep borrowing to pay for everything, or there'll be a generation that just can't afford to get old.

Share this post


Link to post
Share on other sites

i. The boomers will be dead and their assets will be cheap and plentiful

or

ii. The country has imported 50 million refugees and the native population will be repressed and begging on the streets, if they are lucky

Something I've been pondering for a while and have come to a variety of thoughts and conclusions but I thought I'd pose the question here to see what everyone else's thoughts might be.

Share this post


Link to post
Share on other sites

The current generation of near-pensioners didn't save enough - why else is their property their pension?

Property is their pension because they can borrow the money to get it, try going to the bank to get a loan to pay into a pension scheme & see what happens.......

Share this post


Link to post
Share on other sites

This cohort will become electorally more significant as they grow older, stop dicking about on social media and actually vote. At that point, the political will to build more houses and face down the VIs and niimbyism will prevail.

We are already seeing housing becoming more political. Osborne, if nothing else, is a politically astute chancellor and his changes to BTL taxation will probably be seen as the point at which the politics around housing really changed.

Share this post


Link to post
Share on other sites

State pension is a huge welfare expense though and is only growing hence the rising retirement ages.

Yes but don't forget the demographic pyramid will be flipped on its head in 20 odd years.

What's stopping the state making a workplace pension mandatory & scrapping or severely reducing the state pension?

It would be a very nasty thing to do. Unless they forced you to save at least a third of your monthly income you wouldn't save anywhere near enough, yet because of paying this token amount, people will have even more of a false sense of retirement security.

It's alright I'm saving a £100 a month towards my retirement, I'll be dandy. Instead of the expected comfortable retirement, they'll be lucky to fund the bus fare to the food bank/IDS Stasi interrogation centre.

All this propaganda to rid the state pension/raise retirement ages is a misleading ruse.

Share this post


Link to post
Share on other sites

i. The boomers will be dead and their assets will be cheap and plentiful

or

ii. The country has imported 50 million refugees and the native population will be repressed and begging on the streets, if they are lucky

The boomers will be dead and their kids will inherit the property and family portfolios will get larger Victorian style. Generous inheritance tax thresholds spells anarchy.

I guess Tony Blair changed the world, family property portfolio, tick. Useless degrees to indulge kid's rite of passage, tick. Entire economic policy based on house price growth, tick.

Edited by crashmonitor

Share this post


Link to post
Share on other sites

Yes - the music has stopped. If you owned a house when it did well done for you and your future generations. If not, welcome to serfdom.

I find it frightening to see a forecast that by 2020, 33% of all houses will be rentals. Effectively, 66% of the population will be working their guts out to keep 33% in idle riches. How has that ended in history?

Share this post


Link to post
Share on other sites

They'll have to start taxing property wealth sooner or later. All that unearned wealth will have to pay for the housing benefit of the priced out generation. Perhaps a yearly properly tax like they have in America or perhaps CGT on main homes. Sooner or later something will have to be brought in as the housing benefit bill (let alone the other benefits) is going to be astronomical.

Share this post


Link to post
Share on other sites

state retirement homes offshored to Somalia or some other 3rd world shithole.

Where I live there are a lot of Somali families (with 4+ kids) living in the few nice council houses the Borough has. On the market these would cost £1 million plus.

Share this post


Link to post
Share on other sites

Without a crash, we will become a two tier society.

The priced out with parents who have property will perhaps inherit it in their 60s/70s or get BoMaD loans. Those without will likely never own. It'll come to be regarded as normal. For the next generation, I suspect the first group will outnumber the second.

I think there'll be a crash long before then. And outside of the SE and a few other areas, prices are at best stagnant anyhow.

Edited by StainlessSteelCat

Share this post


Link to post
Share on other sites

They'll have to start taxing property wealth sooner or later. All that unearned wealth will have to pay for the housing benefit of the priced out generation. Perhaps a yearly properly tax like they have in America or perhaps CGT on main homes. Sooner or later something will have to be brought in as the housing benefit bill (let alone the other benefits) is going to be astronomical.

CGT on primary residence is the WORST policy (well now the IHT threshold has already been increased that is!)....anyone who could, never would, realise those gains. You need to get the tax code to make the market more liquid not less.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Next General Election   92 members have voted

    1. 1. When do you predict the next general election will be held?


      • 2019
      • 2020
      • 2021
      • 2022

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.