More evidence of increasing wealth gap

cells

CLAPTON wrote: »

I don't know why OO fell in the 90s but it might be the usual impact of deflation.
there was a hugh housing bubble in the late 80 and into the early 90 partly caused by Lawson, after which houses fell in price.
once house prices fall, and more importantly are believed will continue to fall, then people hold off from buying as they will be cheaper next year.
even if prices are flat that will encourage people to save more, knowing the prices won't rise, so they can buy a better house later.

of course once prices do start to rise, then panic buying sets in with all that backlog of people wanting house but who delaid.

that is not likely to be a good explanation as ownership fell in the 16-24, 25-34, 35-44 age groups in the 1990s it did not fall overall

overall ownership was increasing pretty much all the way to 2004/5 and was roughly stable for another two years to 2006/7 before falling after that point.

However as noted even though overall ownership was increasing it was not increasing for the 16-44 age group where it was falling. This clearly indicates it was not a price issue or at lest price was not the dominating factor nor were mortgage availability.


It was something else, my two theories are

1: Life cycle changes
2: A very big increase in single occupancy homes (iirc from ~4m to ~8m units)
3: The increase in very affordable HMOs of a good standard
4: More travail for work especially in the younger ages

1: Generally people starting their adult lives later mostly due to lots more people going to university rather than starting to work age 15/16. Also more divorce leading sometimes from one owner family to one owner and one renter or even two renters in some cases where the home is sold.

2: I think this probably explains how you can have overall increasing ownership 1990-2005 but see ownership of younger people fall from 1990-2000 and 2000-2005.

3: Lots of high quality en-suit HMOs for very affordable prices. One landlord friend showed me a few HMOs and one in particular sticks out in my mind. All professionals on good wages working in a low house price area of the country. All 6 of them could quite easily afford to buy a who house just by themselves yet all 6 were living in that good quality HMOs some for a few years. I think it was more to do with apathy they were comfortable there and it was good value. If HMOs especially good quality ones did not exist and they were renting a flat or small house they might have been more likely to buy

4: self explanatory



Clearly not price dominated else we should have seen a big increase in ownership for the 25-34 and 35-44 bands during the 1990s

cells

ukcarper wrote: »

You tell me why if fell more in 2000s than the 90s when the impact of social change was lower.

Im not sure I accept your argument that social change was lower in the 2000s than in the 1990s how do you come to that conclusion?

Also look at the 45-64 age group. The mid point there is 55 years old. Ownership for 55 year olds fell in the 2000s. Why would that be? Supposedly this was the boomers who had it so good buying in their 20s (1970-1980ss).

My guess is that the few years post recession where computer was saying no to people who were close to pensionable age is responsible? Or maybe divorce?

cells

I think I have just figured out something important and insightful.

Any age group which has an ownership rate above 65% will mean another age group needs to have an ownership rate below 65% (mix adjusted for population) irrespective of price

So if the old (70+) ownership rate is increasing it means the younger (44-) ownership rate has to fall irrespective of price.

This is observed to be true in the uk for the 1990s and 2000s and likely to be true for the 2010s when this decade is over

Its not true for the 1980s but this is explained by the life expectancy (or the mix adjusted for population part) as life expectaancy in 1980 was only 74 so there were not as many 70+ age households as today


lets see if anyone gets this

ukcarper

cells wrote: »

Im not sure I accept your argument that social change was lower in the 2000s than in the 1990s how do you come to that conclusion?

Also look at the 45-64 age group. The mid point there is 55 years old. Ownership for 55 year olds fell in the 2000s. Why would that be? Supposedly this was the boomers who had it so good buying in their 20s (1970-1980ss).

My guess is that the few years post recession where computer was saying no to people who were close to pensionable age is responsible? Or maybe divorce?

The number of people going to university increased more in the 90s than 2000s.

cells

To try and help with the above. Think of a simplified version. Imagine a nation with 35% of its stock as social and 65% as owned.

If one particular group say those age 60-80 years old somehow managed to achieve 80% ownership then clearly the age groups outside of that must be lower than 65% ownership and higher than 35% social. If a couple of decades later somehow the then 60-80 age group manages to achieve 90% ownership then clearly the age groups outside of that must be at an even lower ownership rate than before and an even higher social rate than before

This is obvious right? With just two tenures and no interplay (social not buying private homes not selling into private ownership.)

So irrespective of price if one age groups ownership rate is increase another must be decreasing.


This is effectively what has/is happening in the UK. But of course instead of 65% owners and 35% social we have closer to ~65% owners (~17% social / ~13% private rentals) for the last census.

So Im going to make this claim. Irrespective of price if it were 30% lower 30% higher than what it was in the 1981-2011 period ownership for the young had to fall as ownership for the old increased. The data seems to bear this out with ownership for

ukcarper

cells wrote: »

I think I have just figured out something important and insightful.

Any age group which has an ownership rate above 65% will mean another age group needs to have an ownership rate below 65% (mix adjusted for population) irrespective of price

So if the old (70+) ownership rate is increasing it means the younger (44-) ownership rate has to fall irrespective of price.

This is observed to be true in the uk for the 1990s and 2000s and likely to be true for the 2010s when this decade is over

Its not true for the 1980s but this is explained by the life expectancy (or the mix adjusted for population part) as life expectaancy in 1980 was only 74 so there were not as many 70+ age households as today


lets see if anyone gets this

The people in the age groups are different for each year, the people in age group 64 to 75 will be in the 75+ age group 10 years later you don't seem to be taking that into consideration.

cells

ukcarper wrote: »

The number of people going to university increased more in the 90s than 2000s.

what are the actual numbers?

Also what about divorce?

And single person households?


PS Ive improved the theory somewhat see the above post. I now think one of the primary driver of lower ownership for the young even in periods of low house prices seems to be the increasing ownership of the old and an increasing number of old person households.

In the past say in the 1950s/1960s/1970s and to some extend the 1980s those who were dieing (age 70+) were more in rentals than owners. That meant when they did die there was a bigger forcing function for those homes to go into ownership. But in the 1990s/2000s/2010s they owned more than the general population so on average the forcing function would be the other way. Couple it with higher life expectancy and we have many more homes actually owned by the old than yesteryear

cells

ukcarper wrote: »

The people in the age groups are different for each year, the people in age group 64 to 75 will be in the 75+ age group 10 years later you don't seem to be taking that into consideration.

yes I am aware of this but I dont see how it is relevant, explain what you mean and your conclusion

ukcarper

cells wrote: »

yes I am aware of this but I dont see how it is relevant, explain what you mean and your conclusion

The younger age groups will consist more of new home owners while the older ages groups will mainly existing home owners.

ukcarper

cells wrote: »

what are the actual numbers?

Also what about divorce?

And single person households?


PS Ive improved the theory somewhat see the above post. I now think one of the primary driver of lower ownership for the young even in periods of low house prices seems to be the increasing ownership of the old and an increasing number of old person households.

In the past say in the 1950s/1960s/1970s and to some extend the 1980s those who were dieing (age 70+) were more in rentals than owners. That meant when they did die there was a bigger forcing function for those homes to go into ownership. But in the 1990s/2000s/2010s they owned more than the general population so on average the forcing function would be the other way. Couple it with higher life expectancy and we have many more homes actually owned by the old than yesteryear

People obtaining first degrees 1990 77,000, 2000 243,000, 2010 330,000

Number of divorces 150,000 in 1990, 120,000 in 2010 but marriages decreased over same period probably more people cohabiting, age of firsts marriage has in creased fairly linearly.