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Tempus

Home ownership levels crash for young people

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As if we didn't know. Story here http://www.itv.com/news/2017-05-19/home-ownership-levels-crash-for-young-people/

Research is here http://www.resolutionfoundation.org/media/blog/home-ownership-for-young-families-has-halved-in-west-yorkshire-greater-manchester-and-outer-london-since-the-1990s/

"Home ownership levels among today’s young families are way below those enjoyed by their parents’ generation. But the scale of the falls are simply shocking. As the chart below illustrates, the proportion of young families (aged 25 to 34) owning their homes in Outer London has fallen by almost two-thirds over the last twenty years.

1-4-900x525.png

But before non-Londoners turn away, this is not just another housing sob story about the capital. Look again at the chart and you’ll see stark falls in home ownership across the UK. The proportion of young families owning their home has halved in West Yorkshire and Greater Manchester. Other parts of the South East – including Brighton, Reading and Milton Keynes – aren’t far behind and neither are East Anglia, Merseyside or the South West. The struggle to get on the housing ladder truly is a national problem."

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This is why if its going to be done its now.

As long as the majority of home owners are voters the conservatives are safe those without are becoming more militant either on the right wing side (UKIP/libertarian) or on the left with Corbyn > Successor.

Greed is indeed the snake that eats itself if people in the property industry want to keep making money they need to loose a bit to continue existing in their current form.

Without a crash of 30% + in the SE you are looking at a labour government for at least two election cycles (after this election obv) if they keep their focus on homes.

if its 42% down in 20 years it looks like in another 5-10 we could e in the era of not being a property owning democracy... even Germany with the "renter" culture has 51% property ownership.

 

Edited by Fromage Frais

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3 hours ago, Tempus said:

This Resolution Foundation are cropping up a bit recently so just looked at their website.

"The Resolution Foundation is primarily funded by the Resolution Trust" http://www.resolutionfoundation.org/about-us/mission/ 

Chief Executive of the Trust is Gavin Kellyhttp://resolutiontrust.org/about-us 

On his blog:

Quote

 

Gavin writes on politics, economics and public policy in a personal capacity. He is also Chief Executive of the Resolution Trust and Chair of the Living Wage Commission. Until recently he ran the Resolution Foundation after a long stint as a senior advisor in Downing Street

https://gavinkellyblog.com/

 

A bit of irony there then? What was his advice while the governbankment created the housing bubble?

 

 

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6 minutes ago, TulipsFromThreadneedle said:

The info is out there they just dont seem to grasp it. This website doesn't seem to have many under 25 year olds on it.

....but plenty with kids that are under the age of 25.....parents stick up for their kids, wish the best for their kids, they don't like to see the next generation getting a rougher harder time, being exploited, fewer working benefits, worse pensions and job security......they would like them to buy the same property, at the same age, in the same place, doing the same job as they did......otherwise we are all getting worse off not better off......rolling accumulating debt is killing progress. ;)

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The place I grew up was detached houses with plenty of space (I didn't realise how lucky I was).  If you go back there now there are no children at all playing outside on their bikes etc as we used to.  Instead the houses have grey-haired occupants with the occasional gardener/handyman at work outside.  The occupants have lived there for years and are so old they need to employ gardeners/cleaners etc as they can no longer do any of it themselves.  They're often unable even to go out into their gardens so admire it from inside.  What a waste of good family homes. Meanwhile young families are cramped into small newbuilds or flats.  It's a catastrophe.

There are great swathes of the country like this.

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47 minutes ago, janch said:

The place I grew up was detached houses with plenty of space (I didn't realise how lucky I was).  If you go back there now there are no children at all playing outside on their bikes etc as we used to.  Instead the houses have grey-haired occupants with the occasional gardener/handyman at work outside.  The occupants have lived there for years and are so old they need to employ gardeners/cleaners etc as they can no longer do any of it themselves.  They're often unable even to go out into their gardens so admire it from inside.  What a waste of good family homes. Meanwhile young families are cramped into small newbuilds or flats.  It's a catastrophe.

There are great swathes of the country like this.

I find when chatting to oldies like this, it's not the lack of availability  of bungalows or even the price to downsize that stops them. 

It's having to let go of the status of having a big house that stops them. they are worth it.

thanfully there are forced downsizers of and deaths. the route of 'just letting it out' (to those who inherit) is no longer anywhere near as attractive as it was. 

The top levels of the market are coming down also. starting to see the second 'step' homes are competing with the first level.

 

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The young need to keep saving cash and wait,their time will be here soon enough.

This is what is see ahead.

A huge deflationary downturn and financial crisis that destroys asset (wealth) values.Houses will probably fall by 50% or more where they are the most over valued.A central bank panic that sets the seeds for an inflation cycle equal or greater than the 70s.Interest rates will approach double figures during that cycle.Leveraged companies,BTL and individuals will be wiped out.The inflation wont help them because it will go to producers (miners/commods) and workers (wages).Debt servicing costs will soar including for governments and there will be substantial entitlement cuts that also force down asset prices.

If this deflationary bust does hit il be buying my kids shares in miners,including gold miners after the huge sell off.I fully expect those to rocket in the inflationary cycle that surely follows.

We are at the end of a 35 year deflation cycle that pushed up financial and housing asset values due to falling interest rates.This cycle is about to end with a huge bang and massive amounts of involuntary debt liquidation (and with it wealth destruction) will be the sign off.The four decade disinflation cycle that sent interest rates down and assets up is nearly over.The fact inflation is so low at the top/end of the cycle shows how easily we will fall into deflation.The monetary base in the US is at a 2.5 year low and the leverage on the system cant handle a falling monetary base.People are going to be shell shocked at what lies ahead.Not a depression,but it will feel like one for many many people.

In a way those young people not being able to buy are being saved from what is coming.There will be very little talk about baby boomers being so lucky in a few years because their assets are about to be vapourised.Property is my pension wont be heard again in a couple of years.

A huge deflation followed by an inflation cycle is dead ahead IMO.Lets see.

 

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Actually.....a house that once cost <£10k and vaporised to something at that level.....so be it, the home is still the home, a house is still a house.....who cares what the value is.....the less it is the more that can afford to buy one.....

 

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24 minutes ago, TulipsFromThreadneedle said:

I did and now i'm not young anymore. My savings have been decimated by inflation and HPI.

Profile says joined last week. Posts about the pointlessness of making low offers (even though supposedly a cash buyer), how prices are holding up so well (now national aggregates are falling for the first time in years), thinks the idea of falling prices being 'allowed' by the government is a laughable delusion, thinks people choosing not to buy are "tortured" (whilst "BTLers got to live a far better existence"). Strikes me as a bit moody.

Edited by Pumpkin Muad'Dib

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9 hours ago, Tempus said:

Home ownership levels among today’s young families are way below those enjoyed by their parents’ generation.

Might also be worth noting there will be a proportion of people who don't have families due to the cost of living. Factor that in also and the drop in home ownership might be even greater.

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4 minutes ago, Pumpkin Muad'Dib said:

Profile says joined last week. Posts about the pointlessness of making low offers (even though supposedly a cash buyer), how prices are holding up so well (now national aggregates are falling for the first time in years), thinks the idea of falling prices being 'allowed' by the government is a laughable delusion, thinks people choosing not to buy are "tortured" (whilst "BTLers got to live a far better existence"). Strikes me as a bit moody.

I really cant be bothered to bite Clouseau but as ive got 5 minutes ...

Posts about the pointlessness of making low offers (even though supposedly a cash buyer) - I made low offers in southern England and got nowhere is that really beyond the imagination.

how prices are holding up so well (now national aggregates are falling for the first time in years). - I showed a link to a house that was 50% more than an identical one sold 3 years earlier, seems i'm not allowed to live in an area where prices aren't falling.

thinks the idea of falling prices being 'allowed' by the government is a laughable delusion, - The link to my post says "But prices are holding up remarkably well considering these people are the alleged drivers of house prices insanity."

thinks people choosing not to buy are "tortured" (whilst "BTLers got to live a far better existence"). Strikes me as a bit moody.

BTL landlords have been gifted almost a decade of ZIRP and extremely low interest rates due to QE/TFS/FFL and in many parts of the nation since 2008 have seen significant HPI at the expense of FTB who have been stuck in crap rentals and having to move 4 times with their 7 year old kid. So i will stick with this comment

No need to reply as i wont see the response.

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6 hours ago, Fromage Frais said:

This is why if its going to be done its now.

As long as the majority of home owners are voters the conservatives are safe those without are becoming more militant either on the right wing side (UKIP/libertarian) or on the left with Corbyn > Successor.

Greed is indeed the snake that eats itself if people in the property industry want to keep making money they need to loose a bit to continue existing in their current form.

Without a crash of 30% + in the SE you are looking at a labour government for at least two election cycles (after this election obv) if they keep their focus on homes.

if its 42% down in 20 years it looks like in another 5-10 we could e in the era of not being a property owning democracy... even Germany with the "renter" culture has 51% property ownership.

 

I think Brexit could well be the catalyst...especially with the tradjectory that Mrs May is taking...

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Particularly in London, you see so many people in ordinary jobs, many of which are essential jobs, and they haven't a hope of even buying a 1-bed flat. Someone like an average shop worker might never even be able to rent a 1 bed flat on their own. 

I would expect crime to increase as more and more young people grow up in a city that offers them no chance of a proper home unless they have family money. 

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1 hour ago, TulipsFromThreadneedle said:

I really cant be bothered to bite Clouseau but as ive got 5 minutes ...

[snip]

No need to reply as i wont see the response.

Says he can't be bothered to respond. Then responds. None of it explains the problematic off-topic posting here. Also confusing prices holding up with prices having gone up in the past is convenient when you're trying brush off the idea that you're a bit moody, but if it's a genuine confusion that's alarming; you ought to be able to confidently distinguish the present from the past.

Your posting history is shy of 100 posts so looking through it hardly constitutes detective work, hence the Clouseau reference is just a banal ad hominem. Let's score you so far:

592086af99070_howtoargue.jpg.dd55077b6d270b59b411148f2a5f9026.jpg

a1e6cbdab89a30deb3ebec4413662df1.gif

Edited by Pumpkin Muad'Dib

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1 hour ago, TulipsFromThreadneedle said:

The link to my post says "But prices are holding up remarkably well considering these people are the alleged drivers of house prices insanity."

Apologies, posted the wrong link:

[Apologies to other posters for the disruption to the thread. I'm done here so if TFT is good to his word and has put me on ignore that should be the end of things.]

 

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According to a rather poor Bank of England blog last year, the rise in the rental sector, and therefore to the drop in home ownership among the young,  is a consequence of high property prices. Landlords stepped in to fill the void. 

https://www.google.co.uk/amp/s/bankunderground.co.uk/2016/07/15/the-ballad-of-the-landlord-and-the-loan/amp/

I hope that one of our BOE readers will step in to write a better one to set the record straight. 

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I won't go into too much detail but I've been involved with quite a large house chain this year. From my anecdotal evidence, the housing market appears to be almost entirely propped up by foreign buyers.  

if we're talking young English people, not only are they losing out on home ownership they are being displaced. 

From start to finish with buyer to seller, the chain is about 9 houses in all.  

1 - sold by boomers to Albanians

2- Rental property sold to Pakistan Landlord

3, 4 and 5 involve Polish

6 - Chinese

7 - Indian

8 and 9 involve - Middle aged English

...and this isn't London folks.

Even with Brexit, I think the dye is set for prospective, young English people. Goodbye Home ownership as clearly the elites of this country don't give a ****** about them. Even with a property downturn clearly they'll be in with stiff competition from foreign demand. 

It's difficult to find sympathy since they supposedly were in favour of remaining within the EU. I seriously think they don't realise the massive displacement thats going on.  

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7 hours ago, casual_squash said:

if we're talking young English people, not only are they losing out on home ownership they are being displaced. 

Asians more adept at intergenerational living, recycling equity and chipping in for each other. English playing catch up. A friend, two brothers, one already married other getting married in summer. Both living with parents rent free for around 12 years since leaving uni and saved up a fair bit. The older one planning to give his deposit to younger one so he can buy his own house with his wife whilst him and his wife continue to live with parents. This guy will have five people funding his deposit: him, his wife, his brother, his brothers wife plus some BOMAD. Good luck competing with that. 

Edited by AvoidDebt

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On 20/05/2017 at 3:58 PM, durhamborn said:

The young need to keep saving cash and wait,their time will be here soon enough.

This is what is see ahead.

A huge deflationary downturn and financial crisis that destroys asset (wealth) values.Houses will probably fall by 50% or more where they are the most over valued.A central bank panic that sets the seeds for an inflation cycle equal or greater than the 70s.Interest rates will approach double figures during that cycle.Leveraged companies,BTL and individuals will be wiped out.The inflation wont help them because it will go to producers (miners/commods) and workers (wages).Debt servicing costs will soar including for governments and there will be substantial entitlement cuts that also force down asset prices.

If this deflationary bust does hit il be buying my kids shares in miners,including gold miners after the huge sell off.I fully expect those to rocket in the inflationary cycle that surely follows.

We are at the end of a 35 year deflation cycle that pushed up financial and housing asset values due to falling interest rates.This cycle is about to end with a huge bang and massive amounts of involuntary debt liquidation (and with it wealth destruction) will be the sign off.The four decade disinflation cycle that sent interest rates down and assets up is nearly over.The fact inflation is so low at the top/end of the cycle shows how easily we will fall into deflation.The monetary base in the US is at a 2.5 year low and the leverage on the system cant handle a falling monetary base.People are going to be shell shocked at what lies ahead.Not a depression,but it will feel like one for many many people.

In a way those young people not being able to buy are being saved from what is coming.There will be very little talk about baby boomers being so lucky in a few years because their assets are about to be vapourised.Property is my pension wont be heard again in a couple of years.

A huge deflation followed by an inflation cycle is dead ahead IMO.Lets see.

 

Question - what good is savings?  Everyone values whatever they save against current prices.  When housing falls, likely the price of staples and other important things will rocket and then those that saved will be spending it on more important things than housing that dropped 50%.

While I don't doubt the way it could end as you've given it more thought than I have, inflation in the past hasn't exactly helped savers as adjustments were afterwards and always lag like the obvious CPI does against real inflation today.

Boomers.  It is their pension and that's kind of a problem.  Other half's father had like less than 20K saved all his working life, with state pension that would mean he had nothing.  Having house inflation has allowed him to sell his fathers home to live off it, eating steak twice a week and buying vintage motor bikes and cars to play with.  I don't see that happening again even if you own a house or two.  For those retiring later things really may well be different.

Had a hospital visit last week, a local EMU rather than A&E.  I couldn't help notice how many people in need that were there, mostly again boomers or a like and many with perhaps learning difficulties drinking tea in groups.  When this debt cycle ends, what's in it for them?  There are to many variables to just assume everything will b like today but affordable housing and people quick enough to by miners making good on them while the rest suffer.  Something so big a change has gotta bring riots and gov to their knees

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