Babyboomers buying up property and renting back to the young

Cornucopia

The problem with these threads and the debate generally - did anyone see Panorama: What Britain wants? - is that three issues are conflated, when they may or may not be issues in their own right.


Issue 1 - Decline in Social Housing

I don't know what the figures are, but it seems quite likely that there is less social housing than there was back in the 60s and 70s. This is partly due to it being sold, and partly due to lack of construction. Solution: more construction (maybe examining radical planning and financing solutions?)


Issue 2 - House Price Rises

The London Media bubble loves this topic, though it's a problem most acute in London, the Home Counties and a few selected areas elsewhere. One issue that never seems to come up is the very rational question of how expensive a property should be. In my mind, I can see a "starter" flat being 4-5 x average salary, with a trade-up house being 7-8 x average salary (and typically bought with 2 incomes). Prices in my area are about that level.

I agree that there are many distorting factors, locally and nationally, including very low interest rates, people not buying "starter" properties in their 20s at all (and therefore having no equity to trade up from), student loans being a small, but long-term drain on resources, etc. etc.

Unfortunately, some young people have undoubtedly missed out because of a previous bout of housing propaganda, which insisted that house prices were about to fall dramatically, and that only a fool would purchase then.


Issue 3 - Shortage of Supply

There is a need to build more. I was in a nearby large town the other day, and there is a project on-going to build 5000 homes. That is the kind of scale of development that is required, but it is not without local opposition.


So those are the three main issues. I'm at a loss to see what an individual "boomer" can do about any of those issues. If nothing can be done (by individuals) then I think the pointless intergenerational propaganda needs to stop.

I also fail to see BTL as an issue, rather than merely a symptom of other factors. (Property becomes an attractive investment when interest rates elsewhere are low). There is no net reduction in housing through the expansion of BTL, so it does not address that underlying issue.

antrobus

Loughton_Monkey wrote: »

....the single issue of Labour's attempted half-arsed emergency motion to prevent 'consultancies' or 'paid directorships' [which would be another stab in the back for his own brother who is both an MP and a paid director of a consultancy company]......

On a point of order.

Ed M's brother ain't an MP any more.

ash28

Graham_Devon wrote: »

It's not a better measure....not when looking at boomers specifically. You are just looking at the middle age of all landlords, not age ranges. The age ranges, speak for themselves.

Neither does it take into account the housing stock they hold. You see, you are just looking at landlords and how many there are (and even then, boomers represent 49% of all landlords, so is not the best report to fight against the theme of this thread)..

The report I linked too said that boomers bought more of the stock.

You are assuming (you may not be, but it seems you haven't allowed for this) that each of those landlords hold the same amount of stock. My report is saying the babyboomer age group bought more stock.

So two different reports looking at two different things. Your report does not therefore mean the report I linked to was wrong.

If 75% of landlords are 35 years old, and 25% are 55 years old.... does it mean that the 35 year olds are buying up all the houses? No. The 55 year olds could have 50 houses each, while the 35 year olds have one house each.

What would be interesting is to look at the length of time people have been landlords.....ARLA's report (where your report gets it's age related evidence from) says that 32.5% of landlords have been landlords for between 11 and 20 years....this would rule out vast majority of under 35s anyway, then 14.7% have been landlords between 20 and 40 years......and a further 8% have been landlords for over 40 years...this would rule out most of the boomers.

So if you exclude those who have been landlords for over 40 years then just under half of all landlords have been landlords between 11 and 40 years.

Does this imply that around 15% of 46 to 64 year olds have been landlords for less than 10 years and some of those are some the newer landlords?

I couldn't find any reference to the fact that boomers bought more of the stock in the report - but that could just be me as I skimmed through it. It seems most landlords own one BTL.

The report you cite isn't so much about the age of BTL landlords or the number of properties they own, as the report concedes that older people generally have accumulated more wealth than young people due to "life cycle events", it does go on to say that the private rented sector transfers wealth from the asset poor (the tenants) and gives to the asset rich (landlords).

Its main gripes are the tax breaks given to landlords and argues that they should be removed. Perhaps they should be but as I'm neither a landlord nor a tax expert I wouldn't know.

It also argues that landlords push up prices and force first timebuyers out of the market.....perhaps I would dispute this as from what I can gather "investors" usually want property at the cheapest possible price.

To digress a little....from what I have gleaned over the years it seems that some of the price increases we have seen have been caused by a shortage of properties....BTL does not affect property supply, it may affect property available on the market as landlords seem to keep properties as long term investments and so they may not come up for sale as often as a homeowner's house, but that doesn't actually affect the supply - it stays the same.

The main problem seems to be a lack of new houses being built over quite a number of years and which no government seems to want to address....perhaps because if they, say, shelved HS2 and used the £40bn or so to build new homes for rent then the bottom might well fall out of the property market...and we couldn't have that......could we?

The problem doesn't lie in the private rented sector or with the age of landlords, or with who owns how many houses or who gets tax relief and who is able to avoid CGT when selling BTLs, the problem is much more fundamental than that.

Loughton_Monkey

ash28 wrote: »

......The problem doesn't lie in the private rented sector or with the age of landlords, or with who owns how many houses or who gets tax relief and who is able to avoid CGT when selling BTLs, the problem is much more fundamental than that.

Yes. Almost any 'unfortunate' scenario [house prices, disease, rampant strikes, violence, demonstrations, crime, illegal immigration....] has a highly complex set of causes often going back five or ten years. To try and analyse such a complex chain of events that leads to the situation can result in lively discussions and debates.

Nothing that any one individual can do, however, will change the situation in the short term. The situation will only change after yet another long and complex chain of events - which may involve market forces, human behaviour, or government intervention.

Meanwhile, as individuals, we have to live within the constraints of whatever financial, political, or social climate in which we find ourselves.

As an example, therefore, if we find ourselves in a situation where demand for housing far exceeds the supply of it, we have to 'live' with it. Doesn't matter if it was "caused" by the GFC, mortgage rationing, lack of government spending, reluctance of builders to build....

Older people [who as a function of age alone, by definition, will have accumulated more wealth than a youngster] are having to 'live' with the current situation by working longer for their state pension, suffer virtually zero real interest on their savings, and the very real prospect of ending their days in an expensive home because children are much less inclined to look after their parents than they were generations ago...... These people will therefore look to invest what wealth they have (since they are less fit to earn more by working), and will know very well through experience how to manage finances and live within their means.

Younger people, on the other hand, may choose to deal with it by recognising the need to concentrate even more on education and career. They may recognise that it is not a bad idea to delay the physical settling down and/or entering into large financial commitments (like marriage, children, or occupying a family home of their own). Some, of course, may learn some of the skills from their parents - to do with thrift, investment for the future, and understanding the consequences of life choices.

Others, of course, will just whinge about it and look for a section of the innocent community to blame.

wotsthat

Graham_Devon wrote: »

You've warned me!? How very cute.

Well in that case, I do apologise for posting up material that disagrees with everything you dribble out on to the forum.

My bad!

It would be easier if we had a list of what you will accept really. Actually, forget the list.... five words would do it I guess....."Anything that challenges my statements".

The journalist hasn't read the report he references in the OP and neither has anyone else. It's only available for a fee which means only the author's mum will buy a copy (and she won't read it either).

You've posted an article written by a journalist whose only research has been to cut and paste parts of a press release. It's clickbait designed to snag a few frothers.