Will the next generation be able to buy their own house?

Thrugelmir

theoretica wrote: »

One ordinary house owned can become a 10% deposit for ten new house buyers - fewer obviously if needed for care costs.

Still need the income to obtain a sizable mortgage. House wealth doesn't create well paid jobs.

itwasntme001

Zero_Sum wrote: »

Youve been listening to Great Ape havent you?

Most wont inherit anything until theyre in their 50's or 60's. Very few people in their 20's or early 30's would benefit when theyd be wanting it for a deposit.

If the parent are already well off, they could pass it to grandkids. But chances are if theyre well off then kids would do alright without help (statisticially anyway)

They may not be able to pass the house down for their children's deposit, but they are likely to have other more liquid wealth that can be passed down. It happens a lot especially for parents who have worked in London. The baby boomer generation are about to or have retired and are or will be soon receiving state pension, have accumulated wealth over the decades brought on by rising wages and high interest rates and very good stock market returns (some even having a BTL portfolio) and generous pension schemes. All this means their children who are in their 30s now are likely to get a fair chunk of this wealth to buy a property in London. That is exactly what has happened. Also there are enough people in their 30s who have very well paying jobs to have caused the rise in property prices in London.


So no London is not a bubble - far from it. It maybe expensive but then you could easily say its reasonably priced. Those with baby boomer parents who have worked in London are very lucky indeed.

Zero_Sum

itwasntme001 wrote: »

They may not be able to pass the house down for their children's deposit, but they are likely to have other more liquid wealth that can be passed down. It happens a lot especially for parents who have worked in London. The baby boomer generation are about to or have retired and are or will be soon receiving state pension, have accumulated wealth over the decades brought on by rising wages and high interest rates and very good stock market returns (some even having a BTL portfolio) and generous pension schemes. All this means their children who are in their 30s now are likely to get a fair chunk of this wealth to buy a property in London. That is exactly what has happened. Also there are enough people in their 30s who have very well paying jobs to have caused the rise in property prices in London.


So no London is not a bubble - far from it. It maybe expensive but then you could easily say its reasonably priced. Those with baby boomer parents who have worked in London are very lucky indeed.

Possibly, but you're still only talking about the top few % who can do that.
Obviously this being MSE, most of us are quite financially savvy, but some people do like to spend (a lot) so you might surprised at how many people in well paid jobs who arent very liquid. I know people in decent paid jobs who are constantly skint a few days before payday.

There was a report on the BBC a few months back about the level of inheritances which basically showed that hardly any was filtering down to help the kids buy houses.

Thrugelmir

itwasntme001 wrote: »

So no London is not a bubble - far from it. It maybe expensive but then you could easily say its reasonably priced. Those with baby boomer parents who have worked in London are very lucky indeed.

London has been driven by international money for some time now.

theoretica

Zero_Sum wrote: »

Most wont inherit anything until theyre in their 50's or 60's. Very few people in their 20's or early 30's would benefit when theyd be wanting it for a deposit.

Most won't inherit from a parent at deposit age, but is it that unusual for grandchildren to be included in wills? Anecdotally, I know quite a number of people who inherited house deposits from grandparents. It seems to me quite an obvious thing to think about for anyone who has grandchildren who are unable to afford to buy a home and might change patterns of inheritance.

triathlon

AG47 wrote: »

I wouldn’t buy right at the top of the market before the correction

I don’t know when it will correct all I know isn’t that incorrect markets will correct one way or another

I find most people are wannabe eagles, though life is never easy they try their hardest to hunt the life they want, finding it hard and with great sacrifice, but rewarding in most cases. Life in any era is never easy , but most people roll their sleeves up and put the hours and hard work in and get there.
Then you get the other type of person who does not want to work hard and puts very little into life hoping it just falls in their lap with no effort or they hope they can profit from someone elses misfortune, they are another type of bird, guess which?

itwasntme001

Zero_Sum wrote: »

Possibly, but you're still only talking about the top few % who can do that.
Obviously this being MSE, most of us are quite financially savvy, but some people do like to spend (a lot) so you might surprised at how many people in well paid jobs who arent very liquid. I know people in decent paid jobs who are constantly skint a few days before payday.

There was a report on the BBC a few months back about the level of inheritances which basically showed that hardly any was filtering down to help the kids buy houses.

How do you know a few % are only able to do that? As far as i know there is no data for gifts being made, only inheritances so that BBC article does not tell the full story. Much of the baby boomer generation actually do have a lot of wealth and its only logical to conclude that much of it is and will be passed onto their children before they even die (it makes sense to for those living in cities like London in order to reduce any future inheritance tax liability).

Zero_Sum

theoretica wrote: »

Most won't inherit from a parent at deposit age, but is it that unusual for grandchildren to be included in wills? Anecdotally, I know quite a number of people who inherited house deposits from grandparents. It seems to me quite an obvious thing to think about for anyone who has grandchildren who are unable to afford to buy a home and might change patterns of inheritance.

Its not unusual for grandparents to gift a bit of cash. Ive benefited myself.
But out of people i know, im one of the fortunate ones & well in the minority.

Zero_Sum

itwasntme001 wrote: »

How do you know a few % are only able to do that? As far as i know there is no data for gifts being made, only inheritances so that BBC article does not tell the full story. Much of the baby boomer generation actually do have a lot of wealth and its only logical to conclude that much of it is and will be passed onto their children before they even die (it makes sense to for those living in cities like London in order to reduce any future inheritance tax liability).

You made the point about folk earning decent money. Im basing my assumptions on salary statistics. Im not disagreeing that baby boomers have a lot of wealth. I just dont think its as liquid as you think, with most being tied up in property & pensions.

zagubov

Thrugelmir wrote: »

London has been driven by international money for some time now.

A few years ago a bunch of us went for a walk along the bank of the Thames from Putney to Southwark looking at areas we had lived and worked in over the last 30-40 years.

Whole trail was full of empty apartments in giant buildings which seemed mostly unoccupied. There's plenty of talk about how much land is being wasted on absentee foreign investors who are pricing out locals providing the necessary services to support city life.

There are supposed to be many examples of local developments being marketed internationally - in fact if I google it, it's obvious where it's happening.

We need to find a way to control this. As I said earlier, if London house price inflation doesn't keep continuing, investors will spread out to other areas.