For babyboomers housing "has been free"

Graham_Devon

"For homeowners of my generation, housing has been free – capital gains have far exceeded interest payments. Meanwhile, throughout my adult life, renting has been economically unattractive."

"Baby boomers are sitting on huge, under-used housing equity, but we risk leaving our children a legacy of £1.3 trillion in government debt, £50bn of student loans, poor job prospects and unaffordable homes."

Mr Wilson, Cheif Executive of Legal and General.

I'm just the messenger.

There is though, anger amongst all quarters that the housing crisis (and general recovery IMHO) is being used to whip up intergenerational fall out. This, again, IMHO, takes the focus away from the government.

http://www.telegraph.co.uk/finance/personalfinance/houseprices/10804031/Baby-boomers-were-handed-free-housing-says-top-insurance-boss.html

carslet

i agree it has been free for the older generation,

chucky

Graham_Devon wrote: »

Mr Wilson, Cheif Executive of Legal and General.

I'm just the messenger.

There is though, anger amongst all quarters that the housing crisis (and general recovery IMHO) is being used to whip up intergenerational fall out. This, again, IMHO, takes the focus away from the government.

http://www.telegraph.co.uk/finance/personalfinance/houseprices/10804031/Baby-boomers-were-handed-free-housing-says-top-insurance-boss.html

I saw that article the other day and loved it.

PasturesNew

It's not as simple as that though is it. They've paid mortgage payments all those months - most often at MUCH higher interest rates .... and they'd need to sell to get their hands on any equity, which is then needed for the next house.

Also, not all baby boomers bought a house - depended on their situation/location. And, if I'm honest, it's the FTBers and 30-40s now that I see owning HUGE VALUE houses here on MSE.

I bet more 30-45s are living in £300k houses than people 60+

Graham_Devon

PasturesNew wrote: »

It's not as simple as that though is it. They've paid mortgage payments all those months - most often at MUCH higher interest rates .... and they'd need to sell to get their hands on any equity, which is then needed for the next house.

Yup.... this was my beef with what was suggested.

It also highlights the issue of why increasing prices do not help everyone. For the people he talks about who own one homes, the fact that prices have increased X number of times is of little use to them. Feels as if he's mixing up investments with homes.

Good piece to promite equity withdrawal. However, not sure suggesting that baby boomers got housing for free is the best way to put his argument forward! It's certainly one way to insult a large proportion of his potential customers!

CLAPTON

shows what a moron Mr Wilson is : follows all those other 'clever' financial services CEO/chairman like the ones that ran RBS, Northern Rock, Dunfermline BS, B&B, Co-op, Britannia

absolutely frightening that a CEO of a finance company doesn't know the difference between cash flow and asset value.

wymondham

PasturesNew wrote: »

It's not as simple as that though is it. They've paid mortgage payments all those months - most often at MUCH higher interest rates .... and they'd need to sell to get their hands on any equity, which is then needed for the next house.

Also, not all baby boomers bought a house - depended on their situation/location. And, if I'm honest, it's the FTBers and 30-40s now that I see owning HUGE VALUE houses here on MSE.

I bet more 30-45s are living in £300k houses than people 60+

I was going to say I'm sure I paid a monthly mortgage to get that house! It didn't feel free at 15% either - all these lightweights now on emergency interest rates!!!

PlymouthMaid

Pretty sure it didn't feel free at the time to all those who scrimped to buy a house.

Running_Horse

What about all those who lost their houses in the 90s crash?

Where do they apply for their refund?

[Deleted User]

Since salaries haven't exactly been going up at the same rate as house prices, for quite some time - who do you think this 'free equity' is going to be paid for?

Yup, ultimately this cost is being past down to the young. Now that's all great if house prices keep rising at the same rate; as they'll get the same deal (I'm still not sure why my home is worth 15% more than I paid for it only 2 years ago).

It will just progressively become harder and harder to get a home; bigger and bigger deposits will be needed along with higher salaries (or multiples).

There's going to need to be some massive correction; maybe the only real way it can be 'fixed' is if a few hundred thousand houses flood the market

CLAPTON

ringo_24601 wrote: »

Yup, ultimately this cost is being past down to the young. Now that's all great if house prices keep rising at the same rate; as they'll get the same deal (I'm still not sure why my home is worth 15% more than I paid for it only 2 years ago)

ultimately the inheritance will be passed down to the young