Jump to content
House Price Crash Forum
Sign in to follow this  
jpidding

What Does Inheritance Get Spent On?

Recommended Posts

What Does Inheritance Get Spent On?

If I was to get some (and I didn’t think there was going to be a HPC) I would spend it on a house – in might be possible to maintain high house prices this way

Share this post


Link to post
Share on other sites

If I was to get some (and I didn’t think there was going to be a HPC) I would spend it on a house – in might be possible to maintain high house prices this way

Thats what I'm worried about. Could sustain things.

Share this post


Link to post
Share on other sites

If I was to get some (and I didn’t think there was going to be a HPC) I would spend it on a house – in might be possible to maintain high house prices this way

I suppose what matters is:

1) the % of inheritance money coming from property vs other assets.

2) the % of inheritance money put back into the housing market.

In effect you need to measure the net deficit/surplus caused by money coming out of and back into the property market as a result of inheritance.

Bear in mind that IHT will be levied and remove a very significant part of this inheritance before it can get back into the housing market.... so I expect that the overall effect of inheritance is money being taken out of the market (via IHT, and spending of inheritance on holidays, cars etc).

Share this post


Link to post
Share on other sites

What about there being very little inheritance left after it has disappeared in care home fees and medical expenses.

In any case, if my parents live as long as their parents, I'll have retired and will be looking to downsize myself by the time I inherit anything. Whatever I inherit will probably have to make up the shortfall in old age provision after pensions have been pillaged. It's not "my house is my pension", but "my parents house is my pension".

So no chance of it making it back into the property market.

Share this post


Link to post
Share on other sites

Wine, women & song?

Seriously, I think most is wisely invested. Maybe used to pay down the mortgage (if any). Assume most people die at around 75-80. They'd have kids at that age of an age of 45-50. This lot would inherit but would be unlikely to blow it on plasma screens and trips to Ibiza. They'll probably invest it to fund their retirement or help out their kids.

Share this post


Link to post
Share on other sites

Wine, women & song?

Seriously, I think most is wisely invested. Maybe used to pay down the mortgage (if any). Assume most people die at around 75-80. They'd have kids at that age of an age of 45-50. This lot would inherit but would be unlikely to blow it on plasma screens and trips to Ibiza. They'll probably invest it to fund their retirement or help out their kids.

You seem to be assuming that people in that generation were having kids in their thirties... which was not the case.

That might be the case today where the youngest generation are now up to 30+ years younger than their parents... but in the current generation of retirees their offspring are often only around 20 odd years behind them.

With many old folk now living into their 80s and 90s the inheritance money will only be filtering through when their offspring should already have been sensible enough to have paid off their mortgage.

And as mentionned before, that if its not already spent on care home fees etc.

By the time you get to my generation (I'm 30, I think... yeah 30) I doubt we'll see much as our parents will mainly be using their house as their pension and leaving little inheritance by the time they go.

Share this post


Link to post
Share on other sites

You seem to be assuming that people in that generation were having kids in their thirties... which was not the case.

That might be the case today where the youngest generation are now up to 30+ years younger than their parents... but in the current generation of retirees their offspring are often only around 20 odd years behind them.

With many old folk now living into their 80s and 90s the inheritance money will only be filtering through when their offspring should already have been sensible enough to have paid off their mortgage.

And as mentionned before, that if its not already spent on care home fees etc.

By the time you get to my generation (I'm 30, I think... yeah 30) I doubt we'll see much as our parents will mainly be using their house as their pension and leaving little inheritance by the time they go.

I agree that most people will themselves be close to retirement once their own parents die. Maybe that means that the inheritance skips a generation and goes to help the gradchildren buy a house.

Can I just say that I think that the scenario I'm proposing is highly unlikely, but I think its worth debating all of the possibilities.

JP.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 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%



×
×
  • Create New...

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.