A change in the way people own property?

Windofchange

Reading an article yesterday got me thinking about whether we are going to see a shift in the way that people own property in the coming years.

https://www.theguardian.com/money/2017/dec/29/millennials-set-to-reap-huge-rewards-of-inheritance-boom

Due to the rapid increase in house prices over the past two decades, certain (far from all) millennials, and those slightly older, are set to do quite nicely out of their parents when the time comes. However, we have a situation at the moment where home ownership in this country is falling rapidly amongst the under 45's, suggesting amongst other things that BOMAD are either unable, or unwilling to unlock this wealth.

https://visual.ons.gov.uk/uk-perspectives-housing-and-home-ownership-in-the-uk/

http://www.telegraph.co.uk/property/house-prices/falling-home-ownership-among-young-families-not-just-london/

"Tumbling levels of home ownership among young families are not confined to London and the South-east, as more are being priced out of the housing market."

As per the guardian article, individuals are set to be in their 60's before they receive these inheritances, which isn't much use if you are looking for a small flat in your 20's/30's.

My question / thought is:

With the change in pension laws allowing you to access a lump sum (should you have been saving one of course), and the potential arrival of a windfall inheritance about that time too, are we going to see a rise in the number of people who rent for most of their life, and then simply use a large amount of cash in their 60's to buy a property?

Are we going to see an increase in people actively choosing to rent for the sake of being more economically mobile - travelling, working abroad, moving to different parts of the country etc etc, safe in the knowledge that in 30 years time they too will be mortgage free as they can simply use a lump sum to purchase a property?

Have millennials simply given up with home ownership in the pursuit of other areas of life, and will this heap additional downward pressure on prices for the studio / 1 bed flat end of the market?

Naf

Affordable homes both to buy and to let just aren't coming onto the market enough. BTL mortgage rates and terms mean high rents, wages don't leave people with enough leftover to consider moving, and the longer you leave it the larger the jump from your current rent to that of a better property.

The upshot is that like having kids, moving gets put off until later, waiting for better circumstances.

phillw

Naf wrote: »

The upshot is that like having kids, moving gets put off until later, waiting for better circumstances.

Developers are also doing the same thing, gotta love capitalism.

economic

phillw wrote: »

Developers are also doing the same thing, gotta love capitalism.

Why shouldn't developers want more profit?

Carl31

Lots of things are changing. Old mantras are being replaced. People used to have a job for life, it was looked down upon if you moved jobs a lot, now its regarded detrimental to stay put too long due to stagnation. The ability to travel and experience things was fairly limited years ago, so aspirations were different. Home ownership and a family were the things people strived for, hence the idea that's what you 'have' to do to be a success. Careers and life experiences are starting to replace these old ideas, UK births are down for example. Is it really best to own a house? Ok, on paper it's better than renting if you plan to stay put, but maybe no one will do that in the future. People like the investment element of ownership, but there are far more investment opportunities now that offer much easier returns. I think the idea you have to buy is starting to get lost on People, I kind of understand why too

DigForVictory

I can't afford to help my lads onto the property ladder (they are still in school to be fair, but just getting them to Uni will cost) but I can help them with knowledge - like make time & budget to see a lawyer & get advice on how to club together to afford a house rather than pay someone else's mortgage.
All thanks to the MSE posters.

GreatApe

Life is delayed thanks to changing the working age from 15 to 21-22 that is an additional 6-7 years of schooling which means buying homes is put off for longer

People also get married much layer or not at all. In my parents generation they got married in their early 20s now it seems to be the early 30s again the reason is the excess schooling and also the idea these days that you need everything sorted in your life before you marry and have kids. In the past people got married and had kids and worked together to sort their lives out and make something of themselves which is the right way to go about it

The young of today don't need to worry about housing. It is affordable and they will be gifted additional homes and wealth down the line too. Plenty of young ones also find their family helps them buy a house when they get married. What is unaffordable for a single man spending half the day on house price crash is affordable once they couple up and have two incomes and a little bit of help from bank of mom and pop

SingleSue

Some will be gifted additional homes and wealth, mine for example will not as I do not own a property nor have lots of money. The bank of mum here extends to maybe a tenner here or there, certainly not enough to help with a deposit.

Crashy_Time

Just another ramping exercise, very very funny, many younger people are going to realise that if they can`t buy who is going to keep the prices propped up. Corbyn is coming, and that scares even me. Looks like some landlords are realising that the game has shifted towards sucking up tax and votes for the PTB, not supporting house prices....


https://www.propertytribes.com/is-section-24-illegal-t-127632352.html

GreatApe

SingleSue wrote: »

Some will be gifted additional homes and wealth, mine for example will not as I do not own a property nor have lots of money. The bank of mum here extends to maybe a tenner here or there, certainly not enough to help with a deposit.

Inheritences are like a lotto ticket only a lotto ticket that pays up about 70% of the time

A household typically has two of these lotto tickets (parents and parent in laws) so there is a 70% chance they will get to payouts. 91% chance they will get at least one payout and only 9% chance they will get none

Some £200 billion annually goes from older to younger in the UK. Massive sums of wealth

GreatApe

Crashy_Time wrote: »

Just another ramping exercise, very very funny, many younger people are going to realise that if they can`t buy who is going to keep the prices propped up. Corbyn is coming, and that scares even me. Looks like some landlords are realising that the game has shifted towards sucking up tax and votes for the PTB, not supporting house prices....


https://www.propertytribes.com/is-section-24-illegal-t-127632352.html

But the data shows that only about 25% of private renters rent for 10 or more years.

That means 96% of people buy their own home or get given a social house. Only 4% of the public rent long term.

That 4% is an irrelevant minority. And even in that 4% some want to rent long term like a friend of mine that rents a 1 bedroom flat in zone 1 for the weekdays but owns a family home in the Midlands

You and your crash cheerleader friends don't understand this simple fact. You think 20% rent and that's a massive 5.5 million households. But the vast major of those renters are temporary renters who move on to ownership or social