UK Affordability still very good

ukcarper

GreatApe wrote: »

No I said/estimated over 12 million inherit a portion of an estate valued at £100,000+

That estimate was done using estates that were valued at £100,000+ in 2013 which means we ignored a lot of homes in the north and Scotland and wales etc. For instance in 2013 the average terrace in the north east was £91k.

I think that explains much of the difference between my estimate of 55% receiving an inheritence and the info about 75% or so of older folk owning their home.

I will update using lower estates but I feel the higher figure 75% is more likely to be correct than the 55% estimate especially when gifts are factored in

You used a figure of 200,000 estates per year out of 280,000 total so increase your figure by 40% making 16.8 million still not 75%.

ukcarper

Graham_Devon wrote: »

Normally because there is an abundance of 2 bed houses.

Very few 1 bed homes.

Your 18k over 24 months works out as £750 a month. Not quite the £1,000 per month that was talked about.

As I've always said, some people will of course be able to save these sorts of sumes - my point was, it's not the norm.

OK let's say £750 a month, 30 months to save 10% depost.

If the first house I bought had increased in line with earnings it would now be about £200k but they are selling for £300k so I would now need to save 50%, so if it took someone 2 years to save a deposit in 70s it would take them 3 now not insurmountable.

GreatApe

I think my original idea of multiplying by 30 to take into account 1 generation timeframe can be improved by looking at average life expectancy x estates per year

250,000 estates per year x 81 year life expectancy = 20.25 million estates will be left over a typical lifetime. If the average estate leaves to 2 persons significant sums, eg the 2 kids (we can ignore the trivial amounts left to multiple people within an estate) then 40.5 million of our 65 million population will inherit. Therefore about ~62% inherit and of course that figure will be higher for UK born and lower for non uk born.

Keep in mind significant sums are also gifted as people approach old age and want to avoid IHT and simply get their affairs in order.

ukcarper

GreatApe wrote: »

I think my original idea of multiplying by 30 to take into account 1 generation timeframe can be improved by looking at average life expectancy x estates per year

250,000 estates per year x 81 year life expectancy = 20.25 million estates will be left over a typical lifetime. If the average estate leaves to 2 persons significant sums, eg the 2 kids (we can ignore the trivial amounts left to multiple people within an estate) then 40.5 million of our 65 million population will inherit. Therefore about ~62% inherit and of course that figure will be higher for UK born and lower for non uk born.

Keep in mind significant sums are also gifted as people approach old age and want to avoid IHT and simply get their affairs in order.

Another mistake you are making is by allowing 2 children per estate because that's average family size but those two child have two parents so you shouldn't do that.

GreatApe

ukcarper wrote: »

Another mistake you are making is by allowing 2 children per estate because that's average family size but those two child have two parents so you shouldn't do that.

Explain....

ukcarper

GreatApe wrote: »

Explain....

2 people have 2 kids I kid per person. When both parents die estate passes to 2 children

ukcarper

There were 3.8 million people over 75 2.9 million of which will own property. Assuming they are all single if they died 5.8 million people would inherent not 75%.

Of course with homeownership 64%, 64% could eventually get an inheritance,notice I said could.

GreatApe

ukcarper wrote: »

2 people have 2 kids I kid per person. When both parents die estate passes to 2 children

OK sure so what does that do or mean?

GreatApe

ukcarper wrote: »

There were 3.8 million people over 75 2.9 million of which will own property. Assuming they are all single if they died 5.8 million people would inherent not 75%.

Of course with homeownership 64%, 64% could eventually get an inheritance,notice I said could.

If all the people aged over 75 died this year there will still be significant people alive bow who will inherit from groups below age 75 now who will die later.

Do you agree that over the next 81 years some 20+ million estates will be left?

GreatApe

'the IFS said younger generations looked much more likely to inherit than their predecessors. Someone born in the 1930s had a 40% chance of an inheritance, rising to 61% of those born in the 1950s and 75% of those born in the 1970s.'


Even the IFS says similar to what I've been trying to say. More inheritences now than ever as generational wealth compounds when women have 2 or fewer kids.

The majority clearly do inherit wealth much of it property wealth.