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rantnrave

Property Industry Eye: Housing Wealth Remains in Older and Richer Hands

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Of course it always has been and always will be.  How would anyone who has just left school a few years ago have been able to build up assets/money.  Obviously as people get older provided they have skills that are required in the workplace they have more experience in a job earn more money etc.  

I hope no one was paid for this "research" I did this in O level Economics at school. 

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Thanks for the link - very interesting.

I think future governments already have ideas on how to drain the wealth of the older generation e.g, retrospectively charging nursing and health care on the estate after death.  

Because it will become difficult to transfer wealth, I've always thought that properties with unofficial teenage/granny flat potential are going to become very valuable indeed - thats why I bought such a property. Will have to wait and see if true ;)

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14 minutes ago, happyguy said:

Of course it always has been and always will be. 

Whilst you are of course correct,  I read this as a trend of the wealthiest (older generation) getting more wealthy .

If you consider that the majority of BTL properties are mortgaged by the over 50s (Sometimes, they have no other mortgage), I think there is a clear problem here. Any future government will have to step in to stop this wealth gap across the generations getting worse - hence why I think Teenage/Granny flat properties will be exempt from the more malign tax increases that are inevitable. After all something has to be done to address this.  

This trend has happened all because people are now living longer. It used to be that a large proportion of people died a few years after retiring after a life time of poor food / smoking / working in toxic enviroments etc

Edited by rockerboy

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Its baked in as soon as prices rise from anything other than rising incomes/cheaper rates.

The reason is that without BTL they need young people or first time buyers or at least a buyer without another/previous house.

Prices rise > FTB priced out quickly > people use the equity + gearing to buy a larger home > reaches peak price/lending > falls

However BTL replaced the FTB and extended the cycle

Prices rise > FTB prices out quickly > people use the equity + gearing to buy a larger home > reaches peak price/lending > Borrow money from house to buy a FTB now BTL property at higher price > repeat "virtuous" cycle until collapse.

We have "rising' prices on falling volumes  as currently equity rich owners move though the later phases of the "cycle" like a egg through a snake.

They will then have the problem which they are most likely already in....of being the buyer who has paid the most at the peak and the only way to sell it to the next person (who has less money) is to sell for less.

Its a property and demographic time bomb as so many older people will be selling up over the next few years.

Its really shocking I work in an area full of older people 60+ really nice folk and I see them down the pub/shops...steadily and suddenly they/their spouses pop off one buy one. 

The average lifespan is 7x years which means many people wont get there.

 

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1 hour ago, happyguy said:

Of course it always has been and always will be.  How would anyone who has just left school a few years ago have been able to build up assets/money.  Obviously as people get older provided they have skills that are required in the workplace they have more experience in a job earn more money etc.  

I hope no one was paid for this "research" I did this in O level Economics at school. 

I think that you will find that the percentage of the house wealth owned by the over 40s is now significantly greater that it was 20 years ago - that is the context from which you would get a more nuanced perspective.

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1 hour ago, happyguy said:

Of course it always has been and always will be.  How would anyone who has just left school a few years ago have been able to build up assets/money.  Obviously as people get older provided they have skills that are required in the workplace they have more experience in a job earn more money etc.  

I hope no one was paid for this "research" I did this in O level Economics at school. 

Did you actually open the link?

The point is not that older people own more housing wealth than the young - that's not exactly rocket science, as you explained in your post. This article is highlighting that the % of the UK's property wealth being held the older generations is increasing.

Quotes from the link:

'The research found that of the total £3.8 trillion in home owner equity, the over-65s own 43.5%, the highest proportion ever... we see that wealth concentrated in ever fewer, older hands'

 

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Happytroll strikes again. He knows perfectly well that the normal life cycle of enter work, accumulate housing, retire is different from the overall stock of housing wealth skewing more and more to older age groups as house prices rise and younger people carry on living with parents or rent privately instead of buying.

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19 minutes ago, Ah-so said:

I think that you will find that the percentage of the house wealth owned by the over 40s is now significantly greater that it was 20 years ago - that is the context from which you would get a more nuanced perspective.

Indeed according to the article under 35s own 4.9% of 'home owner equity'.

The shift of wealth into the hands of the older and richer cohort is an inevitable outcome of policy and as such must be deliberate.  So far they are on track to deliver on their goals.  Its difficult to see how this can be sustained however without growing malcontent.

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1 hour ago, happyguy said:

Of course it always has been and always will be.  How would anyone who has just left school a few years ago have been able to build up assets/money.  Obviously as people get older provided they have skills that are required in the workplace they have more experience in a job earn more money etc.  

I hope no one was paid for this "research" I did this in O level Economics at school. 

such a Smart Fella

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8 minutes ago, Dorkins said:

Happytroll strikes again. He knows perfectly well that the normal life cycle of enter work, rent housing, never retire 

sorry had to readjust 

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11 minutes ago, rantnrave said:

Did you actually open the link?

The point is not that older people own more housing wealth than the young - that's not exactly rocket science, as you explained in your post. This article is highlighting that the % of the UK's property wealth being held the older generations is increasing.

Quotes from the link:

'The research found that of the total £3.8 trillion in home owner equity, the over-65s own 43.5%, the highest proportion ever... we see that wealth concentrated in ever fewer, older hands'

 

That 43.5% number looks low to me and the article does go on to state...

'More than £77 in every £100 of housing equity is held by the over-50s, says Savills' ...that is more like I would expect...

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I read somewhere, i think it was david stockdale who worked in reagan administration, who said under reagan taxation was shifted off income as that suited the large baby boomer voter demographic at that time. Then in the clinton bush years,  assets were taxed more lightly because of the wealth the same demographic had now accrued. You could make a case for similar in this country. 

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1 hour ago, rockerboy said:

Because it will become difficult to transfer wealth, I've always thought that properties with unofficial teenage/granny flat potential are going to become very valuable indeed - thats why I bought such a property. Will have to wait and see if true ;)

Yes, it's hard to transfer phony wealth created by bubbles. It tends to pop the bubbles and the phony wealth evaporates.

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2 hours ago, Si1 said:

such a Smart Fella

No it is just obvious

 

2 hours ago, rantnrave said:

The point is not that older people own more housing wealth than the young - that's not exactly rocket science, as you explained in your post. This article is highlighting that the % of the UK's property wealth being held the older generations is increasing.

Yes and it has probably been increasing since the 1950's/60's if not before 

 

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3 hours ago, rockerboy said:

This trend has happened all because people are now living longer. It used to be that a large proportion of people died a few years after retiring after a life time of poor food / smoking / working in toxic enviroments etc

Very fair point

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Yah i'm in my 50's now, happy days. 

 

"More than £77 in every £100 of housing equity is held by the over-50s, says Savills"

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This is also bad news for the banks or building societies that need to lend money to young people who have a career of earning money ahead of them.  If BTL ceases to be an attractive "investment" for those who already own their own house outright then who is going to be taking our mortgages?

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18 minutes ago, markyh said:

Yah i'm in my 50's now, happy days. 

 

"More than £77 in every £100 of housing equity is held by the over-50s, says Savills"

really ?

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3 hours ago, Si1 said:

such a Smart Fella

Save your time folks - this makes interesting threads he tries to mangle much quicker to read:

You've chosen to ignore content by happyguy. Options 

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Lucky side effect for the old. If older people not owning property was the result of bank's get rich schemes the banks  wouldn't give a F*** about that either.

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On 14/01/2019 at 12:55, nothernsoul said:

I read somewhere, i think it was david stockdale who worked in reagan administration, who said under reagan taxation was shifted off income as that suited the large baby boomer voter demographic at that time. Then in the clinton bush years,  assets were taxed more lightly because of the wealth the same demographic had now accrued. You could make a case for similar in this country. 

Very true

This is the most important bit

Quote

At the same time, as affordability becomes more stretched, younger households are having to put off buying their first home until later in life.

 

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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