advertisement


Housing market

gordon said:
From https://www.businessinsider.com/millennials-less-wealth-net-worth-compared-to-boomers-2019-12.

In 1989, baby boomers (defined in a recent Federal Reserve report as Americans born between 1946 and 1964) were roughly the same age millennials (born between 1981 and 1996) are today. But boomers held 21% of America's total net worth in 1989 — seven times millennials' paltry 3% share in 2019, wrote Alex Tabarrok in the blog Marginal Revolution.
Click to expand...
And the relevance to the UK?
 
Bob McC said:
And the relevance to the UK?
Click to expand...
It's a discussion. Similar figures apply to the UK, we know fro from our own experience.

Older people will obviously own more than the young, if they don't then they are set for a miserable old age when they can no longer work and earn. The question is whether it's healthy for the elderly to own as much as they do. As has been said before, a static asset such as an owner occupied house is not contributing significantly to the economy. Older people's assets, with the exception of pension funds held as stocks and shares, are generally static. Young people who consume goods and are active, damn them, and spend money, contribute more to the economy.
 
Woodface said:
Sorry I left my social studies degree behind 20 odd years ago.

Property wealth is only paper anyway for most of us. I am fine with the research but I dislike the way it gets spun into inter generational conflict. I don’t like the way that older people are sometimes resented, yes they’ve been ‘lucky’ in some ways but not in others.

I do try & look at things in the round. I probably had better educational opportunities in some ways than my dad, quite debatable, but my son has had more advantage than I did.

I don’t know whether or how my son will benefit from this financially. One thing is for sure that while ever interest rates are low house prices will rise.

Even if we do have a price crash it is unlikely to make any material difference to affordability. Where does all this house price inflation go, will subsequent generations benefit through inheritance?
Click to expand...
@Woodface, Yes. It’s interesting how some people are obsessed with ‘generations’ and how much other people have. The labels put on this, such as ‘boomers’ seem to have an agenda behind it. That money and resource is thrown at this nonsense is such a waste, setting generations against each other like this is a bad thing. Everyone I know who has kids just wants to do the best they can for them.

Edit: Removed an anecdote.
 
You can argue that excessive property valuations make moving house too expensive. It is when you move that most renovation happens, so there is a reduction in economic activity
 
stevec67 said:
As has been said before, a static asset such as an owner occupied house is not contributing significantly to the economy. Older people's assets, with the exception of pension funds held as stocks and shares, are generally static.
Click to expand...

Not entirely insignificant, Steve, as local and national taxes plus employment of artisans in maintenance and refurbishments plus energy etc. use all contribute to the economy. One could argue that, maybe with the exception of those owners of advanced age, not only are they spending on their dwelling places but still have holidays and enjoy outside entertainment venues, go shopping etcetera.
 
Mike Reed said:
Not entirely insignificant, Steve, as local and national taxes plus employment of artisans in maintenance and refurbishments plus energy etc. use all contribute to the economy. One could argue that, maybe with the exception of those owners of advanced age, not only are they spending on their dwelling places but still have holidays and enjoy outside entertainment venues, go shopping etcetera.
Click to expand...
Come off it. We all know that spending on houses once built and relative to their value is very low. 1% of value pa is quoted. In addition, older people spend less. Yes, holidays and shopping, but working people do that plus the costs of getting to work, a work wardrobe, etc.
 
stevec67 said:
Come off it. We all know that spending on houses once built and relative to their value is very low. 1% of value pa is quoted. In addition, older people spend less. Yes, holidays and shopping, but working people do that plus the costs of getting to work, a work wardrobe, etc.
Click to expand...
So what?
 
Most oldies I know spend all their pension every month, no need to save. I’d guess most young families are going to be in financial shit soon.
 
Woodface said:
Property wealth is only paper anyway for most of us. I am fine with the research but I dislike the way it gets spun into inter generational conflict. I don’t like the way that older people are sometimes resented, yes they’ve been ‘lucky’ in some ways but not in others.
Click to expand...

It's not just paper wealth though. Being born at the right time means you get (on average, across the population, etc.) more living space and a better location. You also get increased earnings over working lifetime and more pension wealth.

Of course older people should not be resented because of this but equally younger people should not be dismissed as feckless and lazy because they don't have a good job, large house and a generous pension. I would also suggest that the latter is to a greater or lesser extent caused by the former.

And there is a policy point here: we should look at some way of redistributing these effects so that the generation after mine doesn't bear an unfair burden particularly in terms of paying for the effects of climate change (which we skillfully avoided). At least if one believes in progressive politics.

(I should perhaps restate that in making these points my parents (1943, 1945) and me (1967) are in pretty much the golden spot in terms of demographic advantage.)

Woodface said:
Even if we do have a price crash it is unlikely to make any material difference to affordability. Where does all this house price inflation go, will subsequent generations benefit through inheritance?
Click to expand...

I don't think there will be a price crash nor do I think that would be a good thing. Ultimately current and future generations will just be gradually less well off as these effects play out over time, although obviously such effects are complex and all wrapped up in other demographic effects (immigration, birth rates, longevity, etc. etc.).

Which again points to policy options, which brings us back to the Resolution Foundation and the video I posted. The point of this is not so young people you can argue with their rich uncles over Christmas dinner but to inform and find policy options to improve people's lives.
 
matthewr said:
It's not just paper wealth though. Being born at the right time means you get (on average, across the population, etc.) more living space and a better location. You also get increased earnings over working lifetime and more pension wealth.

Of course older people should not be resented because of this but equally younger people should not be dismissed as feckless and lazy because they don't have a good job, large house and a generous pension. I would also suggest that the latter is to a greater or lesser extent caused by the former.

And there is a policy point here: we should look at some way of redistributing these effects so that the generation after mine doesn't bear an unfair burden particularly in terms of paying for the effects of climate change (which we skillfully avoided). At least if one believes in progressive politics.

(I should perhaps restate that in making these points my parents (1943, 1945) and me (1967) are in pretty much the golden spot in terms of demographic advantage.)



I don't think there will be a price crash nor do I think that would be a good thing. Ultimately current and future generations will just be gradually less well off as these effects play out over time, although obviously such effects are complex and all wrapped up in other demographic effects (immigration, birth rates, longevity, etc. etc.).

Which again points to policy options, which brings us back to the Resolution Foundation and the video I posted. The point of this is not so young people you can argue with their rich uncles over Christmas dinner but to inform and find policy options to improve people's lives.
Click to expand...
Great post this.

I think the established middle classes will continue to do OK, the working classes will generally have far less to pass on. Also, we are living longer, this is great but means some will be retired almost as long as they worked.

The ultimate answer is to build more affordable housing & increase supply. Other policies around second homes & property as investment vehicles could also be heavily taxed.
 
Woodface said:
Also, we are living longer, this is great but means some will be retired almost as long as they worked.
Click to expand...

I'm not sure how you square that with the working classes having less, surely this just means they'll be working longer? Relative to previous generations who died younger the gap is probably the same. Which is a grim prospect if you're in any sort of manual job, no way do I want to be doing my job in my 70s, if I even could!
 
Average Life Expectancy UK | Onaverage.co.uk
Is the average life expectancy increasing in the UK?
Yes, the average life expectancy in the UK has been increasing almost every year. In 1960 the average life expectancy in the UK was only 71.13 years. In 1980 it rose to 73.68 years and in 2000 the average life expectancy reached 77.74 years. By now the average life expectancy has exceeded 80 years.
Click to expand...
Pensions are being paid out for far longer these days than was planned for when the system was established.
 
matt j said:
I'm not sure how you square that with the working classes having less, surely this just means they'll be working longer? Relative to previous generations who died younger the gap is probably the same. Which is a grim prospect if you're in any sort of manual job, no way do I want to be doing my job in my 70s, if I even could!
Click to expand...
Sorry, I don’t understand your point.
 
You must log in or register to reply here.


advertisement


Back
Top