Rebalancing of housing market

Rich2808

There is a lot of work to do.

In 1996 the proportion of people aged 25-34 in London who owned a home was nearly 50% - now its only 20%.

In the south east nearly two thirds of 25-34 year olds owned in 1996 - in 2016 it was less than one third.

For 25- to 34-year-olds earning between £22,200 and £30,600 per year (the typical median wage), home ownership fell to just 27% in 2016 from 65% two decades ago.

What an impending long term social disaster - who is going to pay the rent of these renters when they retire?

PS I suppose I shouldn't ask who is going to be able to afford to buy these supposed £2m flats we will have in Birmingham in a few years?

Thrugelmir

Rich2808 wrote: »

What an impending long term social disaster - who is going to pay the rent of these renters when they retire?

Already a generation with interest only mortgages. With no repayment plans. Now facing the prospects of steadily rising interest rates.

economic

Rich2808 wrote: »

There is a lot of work to do.

In 1996 the proportion of people aged 25-34 in London who owned a home was nearly 50% - now its only 20%.

In the south east nearly two thirds of 25-34 year olds owned in 1996 - in 2016 it was less than one third.

For 25- to 34-year-olds earning between £22,200 and £30,600 per year (the typical median wage), home ownership fell to just 27% in 2016 from 65% two decades ago.

What an impending long term social disaster - who is going to pay the rent of these renters when they retire?

PS I suppose I shouldn't ask who is going to be able to afford to buy these supposed £2m flats we will have in Birmingham in a few years?

Since 1996 there has been a large increase in immigrants in that age group who have come to London to stay. Why should they be able to afford to buy?

Also London is a very attractive city to work given wages and there has been a large increase in the number of jobs available in London, and so they would be renting until they can afford something (if they even want to buy in London).

Also 25-34 is a large age group range, why should a 25 year old be able to buy when he/she is only 2/3 years into their employment?

GreatApe

Rich2808 wrote: »

There is a lot of work to do.

In 1996 the proportion of people aged 25-34 in London who owned a home was nearly 50% - now its only 20%.

In the south east nearly two thirds of 25-34 year olds owned in 1996 - in 2016 it was less than one third.

For 25- to 34-year-olds earning between £22,200 and £30,600 per year (the typical median wage), home ownership fell to just 27% in 2016 from 65% two decades ago.

What an impending long term social disaster - who is going to pay the rent of these renters when they retire?

PS I suppose I shouldn't ask who is going to be able to afford to buy these supposed £2m flats we will have in Birmingham in a few years?

Most Brits will get free housing free pensions and free wealth via gifts and Inheritences

Something in the region of £200 billion annually is gifted from old to younger. That's roughly equal to the value of 1 million homes for free each year transfered to the younger

The primary reason renting increased from 2004 onward is the mass migration since 2004
Import 5 million migrants and you need 2 million more rentals to house them in and that is more or less what happened. To a lessor degree there are other factors too like more single occupancy households due to divorce and kids starting work life later due to additional 'education'

GreatApe

economic wrote: »

Since 1996 there has been a large increase in immigrants in that age group who have come to London to stay. Why should they be able to afford to buy?

Also London is a very attractive city to work given wages and there has been a large increase in the number of jobs available in London, and so they would be renting until they can afford something (if they even want to buy in London).

Also 25-34 is a large age group range, why should a 25 year old be able to buy when he/she is only 2/3 years into their employment?

Lots of rentals shouldn't even count as rentals.
From memory something like 500,000 homes are 'rented' for £0 rent things like parents buying homes for their kids to live in for free or kids buying their elderly parents homes to live in for free

westernpromise

Thrugelmir wrote: »

Already a generation with interest only mortgages. With no repayment plans. Now facing the prospects of steadily rising interest rates.

Hardly a generation. This article says 1 in 5 have an i/o mortgage
http://www.independent.co.uk/money/spend-save/interest-only-mortgages-house-owners-eviction-lose-home-fca-debts-repay-providers-a8189211.html
but that appears to include landlords.

This article
https://www.ft.com/content/e9907e9a-05dc-11e8-9650-9c0ad2d7c5b5
reckons "70 per cent of interest-only home loans are in the hands of people over the age of 45 and a significant portion of these borrowers will be over the age of 65 by the time their mortgage matures".

An interest-only mortgage is still better than renting. You're just renting money to buy property rather than renting the actual property.

westernpromise

economic wrote: »

Since 1996 there has been a large increase in immigrants in that age group who have come to London to stay. Why should they be able to afford to buy?

Also London is a very attractive city to work given wages and there has been a large increase in the number of jobs available in London, and so they would be renting until they can afford something (if they even want to buy in London).

Also 25-34 is a large age group range, why should a 25 year old be able to buy when he/she is only 2/3 years into their employment?

It's also not really accurate to speak of 30-year-olds in 1996 owning properties. I was there and it was much more a case of the property owning you.