Inter generational fairness

GreatApe

mwpt wrote: »

The problem of intergeneration wealth discrepancy and housing issues in certain parts of the country. It is pretty much accepted now by most analysts, kind of like climate change. It is only some people clinging on to the idea that it isn't the case because they just see it as complaining.

The main problem I see is that those who are from poorer parts of society who have not worked harder, not worked more skilled and not worked more hours&years are unhappy that their lot in life in not in the top one third but rather in the bottom one third. There is no way for the bottom one third to vote themselves up because there will always be a bottom one third.

An individual working harder and longer than their parents to dig themselves out of a problem is fine, but it doesn't make the general problem go away.

What is the general problem?
Clearly its not easy to define because life is not one simple variable you can look at without considering the 101 other variables that interact. How can you conclude that the young having marginally less housing now vs 20 years ago is a negative without pointing out and considering the other differences like the young of yesteryear having started work earlier?

I simply do not buy the argument that life is worse for today's young than it was a generation ago. In fact I would argue the opposite that things are much better for the young of today. I would much rather be the 30 year old of today than the 30 year old of 1986.

Housing is largely a non issue in the UK. There is perhaps a 100-200k shortage of flats in inner London besides that things are fine. The young have every chance to make good choices and have a decent life in the UK. Sure they might not be able to buy a £1m terrace in hackney just like I am outbid and out competed on the £10m house in Kensington. I don't think its any use to highlight that the Kensington £10m house was £1m twenty years ago. How does that help? The reality is the people in Kensington outbidding me by 10x what I can afford either have better jobs or more inherited/gifted wealth. I don't see this as some injustice that the government needs to ban them from the country or from bidding nor do I feel that Kensington or the government need to increase the quantity of homes in Kensington by 10x so my budget can be one of the winning bidders.

Inner London is expensive. People bidding with below average single salaries and zero inherited/gifted wealth are scratching their heads as to why they are not winning when the competition are couples with average or better full time salaries plus possibly one or more than one generation of inherited wealth.


The UK is a great place with great opportunity and the young have great prospects. If a young person finds thir household on the bottom quarter of society and wants to move up they have to work harder better longer smarter and possibly do that for more than one generation because simply put the top quarter of society (and their parents/g-parents) did just that.

GreatApe

ukcarper wrote: »

I agree that in certain parts of the country prioperty has become unaffordable for a large number of people more than in the past. But I don't think you can lay the responsibility on one age group. I don't believe that it is saving the deposit that is the problem, if you earn enough to get a big enough mortgage then saving the deposit should not be impossible the problem is the price of property compared to earnings. The other problem is the lack of truly affordable housing contrary to what some people think there will always be low paid workers and a need for them and I personally think there should be reasonable and secure property available for them.

The only problem is really in inner London and much less of a problem than most think. Probably the shortage is in the order of 100-200k flats in inner zone 1&2.

The reason London and especially inner London is expensive is because all the rich people moved there and are moving there. Go back 20 years and the rich were moving out of inner London and that was why it was cheap.

So you get a situation where people earning £100k in banking can't afford to buy a family house in z1/z2. The simple fact is they are being outbid not by people earning more than them but by people with intergenerational wealth or capital.

I'm not sure this is a problem but the solution is either to get rich people put of London or to have a tremendous mass build of flats in inner London specifically zone 1/2.

Both of those are very difficult and wibt solve anything. To forcefully (taxation policy regulation quota) move the people that want to be there will have an economic hit. To build lots of flats in z1/2 is very expensive. Berkeley builds flats in z2 and sells them for £1m+ and have a 20% margin. Reduce the margin to zero and you still have a cost of £0.8m hardly an affordable figure for a nurse or foremen or even a headteacher or banker on £150k.

Inner London now needs to be viewed in the same way as Kensington is and was viewed ten twenty years ago. Its a place for the rich with generational wealth. Building more in Kensington to make it more affordable isn't a viable solution and that is becoming true of inner London too.

Having said that there is capacity in inner London to add at least 200k additional flats mostly via knocking down the council stock and replacing with higher density. Don't expect that to be done quickly or to drop prices though.

ukcarper

GreatApe wrote: »

The only problem is really in inner London and much less of a problem than most think. Probably the shortage is in the order of 100-200k flats in inner zone 1&2.

The reason London and especially inner London is expensive is because all the rich people moved there and are moving there. Go back 20 years and the rich were moving out of inner London and that was why it was cheap.

So you get a situation where people earning £100k in banking can't afford to buy a family house in z1/z2. The simple fact is they are being outbid not by people earning more than them but by people with intergenerational wealth or capital.

I'm not sure this is a problem but the solution is either to get rich people put of London or to have a tremendous mass build of flats in inner London specifically zone 1/2.

Both of those are very difficult and wibt solve anything. To forcefully (taxation policy regulation quota) move the people that want to be there will have an economic hit. To build lots of flats in z1/2 is very expensive. Berkeley builds flats in z2 and sells them for £1m+ and have a 20% margin. Reduce the margin to zero and you still have a cost of £0.8m hardly an affordable figure for a nurse or foremen or even a headteacher or banker on £150k.

Inner London now needs to be viewed in the same way as Kensington is and was viewed ten twenty years ago. Its a place for the rich with generational wealth. Building more in Kensington to make it more affordable isn't a viable solution and that is becoming true of inner London too.

Having said that there is capacity in inner London to add at least 200k additional flats mostly via knocking down the council stock and replacing with higher density. Don't expect that to be done quickly or to drop prices though.

I don't agree a 2 bed terrace where I am is £300k to be able to buy that you would need to be earning a joint incom of over £60k. Rent on an equivelent property is £850 a month.

pop_gun

GreatApe wrote: »

What problem?

The main problem I see is that those who are from poorer parts of society who have not worked harder, not worked more skilled and not worked more hours&years are unhappy that their lot in life in not in the top one third but rather in the bottom one third. There is no way for the bottom one third to vote themselves up because there will always be a bottom one third.




Yes I do have suggestions but they are often not well received.

If you are from the poorer portion of society you simply have to work harder longer better to move up. There are some shortcuts for those who really want it like finding and marrying a richer spouse/family but for the majority it really is working longer better and smarter

The example of someone starting work at 16 and saving almost all they can until 26 is such an example of how someone from a poor family can become a middle income/asset family and how they themselves can set up their own children to start off from a higher level.

I agree to some extent. I come from a poor family and I don't want to remain poor. Especially in my old age. So sacrifices have to be made now to ensure that doesn't happen.

Although the environment in which we operate has seen property prices double since the height of the bubble. How is that even possible if we've been in a recession\recovery since 2008?
The market isn't fuelling the price increases, the central bank is.
Before the crash you use to have a decent return on savings. Now you don't. The goalposts are being moved arbitrarily and house prices are doubling, roughly, every 10 years. Rental rates have already maxed out, due to tenants being unable to afford any more increases.
What happens when property prices double? Will the landlords absorb the higher repayments?
Will tenants move out of London and commute in?

Regarding the inter generational politics, it would solve a lot of problems if the government raised the retirement age to 80. This could be phased in over the next 10 years. It's the only practical solution there is.

ukcarper

pop_gun wrote: »

I agree to some extent. I come from a poor family and I don't want to remain poor. Especially in my old age. So sacrifices have to be made now to ensure that doesn't happen.

Although the environment in which we operate has seen property prices double since the height of the bubble. How is that even possible if we've been in a recession\recovery since 2008?
The market isn't fuelling the price increases, the central bank is.
Before the crash you use to have a decent return on savings. Now you don't. The goalposts are being moved arbitrarily and house prices are doubling, roughly, every 10 years. Rental rates have already maxed out, due to tenants being unable to afford any more increases.
What happens when property prices double? Will the landlords absorb the higher repayments?
Will tenants move out of London and commute in?

Regarding the inter generational politics, it would solve a lot of problems if the government raised the retirement age to 80. This could be phased in over the next 10 years. It's the only practical solution there is.

Prices haven't double since 2008 in country as a whole prices have increased by less than 20% and in London it's about 60%

ruggedtoast

GreatApe wrote: »

The only problem is really in inner London and much less of a problem than most think. Probably the shortage is in the order of 100-200k flats in inner zone 1&2.

The reason London and especially inner London is expensive is because all the rich people moved there and are moving there. Go back 20 years and the rich were moving out of inner London and that was why it was cheap.

So you get a situation where people earning £100k in banking can't afford to buy a family house in z1/z2. The simple fact is they are being outbid not by people earning more than them but by people with intergenerational wealth or capital.

I'm not sure this is a problem but the solution is either to get rich people put of London or to have a tremendous mass build of flats in inner London specifically zone 1/2.

Both of those are very difficult and wibt solve anything. To forcefully (taxation policy regulation quota) move the people that want to be there will have an economic hit. To build lots of flats in z1/2 is very expensive. Berkeley builds flats in z2 and sells them for £1m+ and have a 20% margin. Reduce the margin to zero and you still have a cost of £0.8m hardly an affordable figure for a nurse or foremen or even a headteacher or banker on £150k.

Inner London now needs to be viewed in the same way as Kensington is and was viewed ten twenty years ago. Its a place for the rich with generational wealth. Building more in Kensington to make it more affordable isn't a viable solution and that is becoming true of inner London too.

Having said that there is capacity in inner London to add at least 200k additional flats mostly via knocking down the council stock and replacing with higher density. Don't expect that to be done quickly or to drop prices though.

The only place where affordable housing is a problem is Zones 1 and 2, in London?

Right, thanks for clearing that up.

Have you ever been to London? Or in fact, anywhere that people live?

mwpt

ukcarper wrote: »

I agree that in certain parts of the country prioperty has become unaffordable for a large number of people more than in the past. But I don't think you can lay the responsibility on one age group.

I'm not, the system need changing.

But it works both ways. On here it is extremely common to call today's youth lazy, unwilling to save, won't vote, own fault for brexit etc. If it is acceptable to do that (and it's not) then why isn't it acceptable for ruggedtoast to call the boomer generation selfish (again, not something I engage in).

missbiggles1

mwpt wrote: »

I'm not, the system need changing.

But it works both ways. On here it is extremely common to call today's youth lazy, unwilling to save, won't vote, own fault for brexit etc. If it is acceptable to do that (and it's not) then why isn't it acceptable for ruggedtoast to call the boomer generation selfish (again, not something I engage in).

Whilst I take your point on the comparison, surely the difference is that any advantages that boomers may have gained have happened (in the most part) unconsciously or with lack of knowledge whereas the choices that young people make are made consciously, at a time when there is more access to information than ever before?

mwpt

GreatApe wrote: »

What is the general problem?
Clearly its not easy to define because life is not one simple variable you can look at without considering the 101 other variables that interact. How can you conclude that the young having marginally less housing now vs 20 years ago is a negative without pointing out and considering the other differences like the young of yesteryear having started work earlier?

I've already said that it isn't black and white and I also said that given the choice I'd rather be in my 20s now than a "boomer" with a big house. You did read that post, right?

So I'd argue it is you who is looking at things in black and white. You seem unwilling to make any concessions that there is any issue needing resolving, and anyone who points out potential problems is just "crying", so we'll just agree to disagree.

mwpt

missbiggles1 wrote: »

Whilst I take your point on the comparison, surely the difference is that any advantages that boomers may have gained have happened (in the most part) unconsciously or with lack of knowledge whereas the choices that young people make are made consciously, at a time when there is more access to information than ever before?

I'm not sure who you're trying to convince though misbiggles. I've said multiple times I don't blame the boomers, so we agree on that, right?

But I'm just going to have to disagree with you about the youth. I just don't agree with labelling an entire generation as lazy as if human biology has somehow changed over one generation. It feels to me that - without meaning to - you're saying the previous generations were superior.