"Housing Market Slumps"

ukcarper

Only 50% of people leave an inheritance, looking at table cells linked to 50% of those that do leave less than £200k and only 3% are over a million.

So 50% of people will get no inheritance, 25% will get a share of £200k or less and only 1.5% will get a share of a million plus.

GreatApe

I didn't say it all flowed into housing but I suspect a lot of it does. If someone gets an inheritance or sum of money they only really have two options. One is to put it into a bank account (or pay down debt which is the same) and the bank then lends this money out mostly as mortgages to buy homes. Or if they don't put it into a bank they are likely to buy a house yo live in or as an investment. Of course they could buy shares but I think very few people do that

Also gifts are probably flowing to younger people while inheritance to older persons. Gifts data is hard to come by so we have spoken mostly of inheritance and how huge and widespread they are.

Also old people don't downsize in my experience. My parents got an inheritance in their early 50s and bought a house twice the size they were in. Recently another relative in their mid 50s got a sum of money and again used it to buy a house twice as big as their previous one.

Since we know we have some 1.2 transaction per year and a stock of 27-28 million homes that means each house transacts on average once every 23 years.

So if people are buying their first home between the ages of 25-35 then the second purchase is between 48-58 during which time they have inheritance help to in most cases I think move up the ladder from their first time buyer purchase.

Also the housing ladder is false. It is a housing step with the average person only buying one house after their first purchase and probably with many only buying one house and living their whole lives in that. Certainly transactions are too low to indicate any more than 2 purchases for a homeowner in a lifetime as typical.

lisyloo

Also old people don't downsize in my experience.

Who buys all those McCarthy and stone type retirement properties then?
Seen lots of them being built and sold.
I've also seen lots of flats when I've been looking that I'm not old enough to buy.
I wonder who's buying these if you're correct that people don't downsize???

lisyloo

Now I need a four bedroom house

I presume that's for offspring?
Out of interest how old do you expect to be when you no longer need to provide bedrooms for your kids? or if you don't like answering personally then in general?
I would have expected most people to stop providing accommodation for their kids around 22.
My parents were 26 and 28 when they finished their family.
It's going to vary but I'd expect people to stop providing bedrooms at between 50 and 65 (roughly around the time they inherit).

GreatApe

ukcarper wrote: »

Only 50% of people leave an inheritance, looking at table cells linked to 50% of those that do leave less than £200k and only 3% are over a million.

So 50% of people will get no inheritance, 25% will get a share of £200k or less and only 1.5% will get a share of a million plus.

Nicely done. ignore everyone between £200k to £1 million

ukcarper

GreatApe wrote: »

Nicely done. ignore everyone between £200k to £1 million

Easy enough to work out its the other 23.5%, but more than half of those are in the £200 to £300k group with the bulk of the others in the £300 to £500k group.

GreatApe

lisyloo wrote: »

Who buys all those McCarthy and stone type retirement properties then?
Seen lots of them being built and sold.
I've also seen lots of flats when I've been looking that I'm not old enough to buy.
I wonder who's buying these if you're correct that people don't downsize???

Neither of our experiences will be sufficient to draw a conclusion which is why I pointed out that the average house only transacts once every 23 years. (About 1.2 million annual transactions over about 27.5 million homes).

So if a first time buyer buys a first time buyer property at age 30 then somewhere around age 53 they typically buy their second and last home.

What's more likely that people who buy the second and last home buy a home bigger and better than their first time purchase or that they downsize from their FTB property?

Again don't mistake this as saying no one downsizes there sure are some. The person my parents bought their home from was down sizing however my parents were up sizing.

ukcarper

GreatApe wrote: »

Neither of our experiences will be sufficient to draw a conclusion which is why I pointed out that the average house only transacts once every 23 years. (About 1.2 million annual transactions over about 27.5 million homes).

So if a first time buyer buys a first time buyer property at age 30 then somewhere around age 53 they typically buy their second and last home.

What's more likely that people who buy the second and last home buy a home bigger and better than their first time purchase or that they downsize from their FTB property?

Again don't mistake this as saying no one downsizes there sure are some. The person my parents bought their home from was down sizing however my parents were up sizing.

You can't say that I lived in my first house 9 years but I have lived in my present house 30 years and do not intend to move for some time if at all. People typical stay in thier first home less time than thier second home and stay in thier final home longest.

GreatApe

ukcarper wrote: »

That's the point I'm trying to make, most of the people who receive a inheritance do not use it to buy a property. Depending on age and situation of thier children they might help them to buy property, but imply that it all of it impact housing is not right.

Nobody implied all of it went into housing.

why not post how much of the £77 billion in 2013/14 by your reckoning went in to housing.
Why not post how large a sum you think gifts are annually.

There isn't much value to someone saying 'oh no that doesn't sound right'

lisyloo

Neither of our experiences will be sufficient to draw a conclusion

Agree.

So if a first time buyer buys a first time buyer property at age 30 then somewhere around age 53 they typically buy their second and last home.

Having accepted the above, that sounds really odd to me.
First time properties are often flats or at most 2 bed rabbit hutches, which might be ok for a baby.
Most people up size around the time (preferably before) they start or expand a family.
Some don't downsize later in llfe if they have a modest home (say 3 -bed semi).
Those with large homes that they don't need anymore might downsize or might buy two smaller homes.
Those who then experience disability sometimes buy bungalows or move into sheltered type accommodation that suit their needs.


How can (these days) people afford family accommodation as home number 1?
and why would you want to upsize when your thoughts turn to retirement?