IFISAcava
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Post by IFISAcava on May 11, 2018 10:39:07 GMT
Many Baby Boomers as parents & grandparents already provide financial support to their children & grand children. The idea that millennials are entitled to a £10k handout is preposterous. I watched a TV quiz the other night in which a 23 year old had a chance to win £6k. When asked by Bradley Walsh, the quizmaster, what he'd spend it on he replied, a holiday in Bali or maybe a deposit for a house. Therein lies the problem! At that age I was working every hour to raise a deposit for a house. I was prepared to wait for the holidays, Iphones & other luxuries until I was on the property ladder. When I got my first mortgage in 1976 I was paying 11% pa interest which was the prevailing rate at the time. The big difference is that in 1976 house prices were 3 times average earnings. Currently they are nearly 8 times earnings, much more in the South/London. So I would say therein lies the problem actually - even by foregoing the holiday the house isn't affordable, however many hours are worked, so might as well have the holiday. I think the boomers' sense of entitlement (to unearned housing wealth) is at least as great as the millennials. see: www.ons.gov.uk/peoplepopulationandcommunity/housing/bulletins/housingaffordabilityinenglandandwales/2017
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IFISAcava
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Post by IFISAcava on May 11, 2018 10:42:56 GMT
I think the best thing the 'boomers' could do for the millenials is to pressure government to: -build many more houses -allow councils to borrow money to build houses -relax the greenbelt -make planning easier and cheaper The greenbelt was - and is - a good idea, but I find it simply ridiculous that we have to stick to boundaries established arbitrarily decades ago (60+ years) despite a large increase in population over that time. Though some will say the country will be 'concreted over', that is not backed up by facts. I believe only something like 12% of the country is developed, hence even if we extended all built up areas by 10%, we'd still only have 13% of the country developed. Homeowners have a huge incentive not to allow much house building, i.e. the protection of the value of their house. And politicians have a huge incentive to do whatever homeowners want in order to get votes and be elected. But it isn't sustainable, and we will pay the price, the bill for which may come in many ways not all of which will be financial.
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cb25
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Post by cb25 on May 11, 2018 11:39:00 GMT
I think the best thing the 'boomers' could do for the millenials is to pressure government to: -build many more houses -allow councils to borrow money to build houses -relax the greenbelt -make planning easier and cheaper The greenbelt was - and is - a good idea, but I find it simply ridiculous that we have to stick to boundaries established arbitrarily decades ago (60+ years) despite a large increase in population over that time. Though some will say the country will be 'concreted over', that is not backed up by facts. I believe only something like 12% of the country is developed, hence even if we extended all built up areas by 10%, we'd still only have 13% of the country developed. Homeowners have a huge incentive not to allow much house building, i.e. the protection of the value of their house. And politicians have a huge incentive to do whatever homeowners want in order to get votes and be elected. But it isn't sustainable, and we will pay the price, the bill for which may come in many ways not all of which will be financial. I think that for some of the older generation, young people having difficulty in the housing market feeds into the narrative "we (the older generation) managed to buy houses easily enough because we worked so much harder than the young today". Total bs imo, the housing market was a lot different decades ago.
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Post by lynnanthony on May 11, 2018 11:58:27 GMT
....unearned housing wealth.... How do I spend it?
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Post by lynnanthony on May 11, 2018 12:05:27 GMT
I think that for some of the older generation, young people having difficulty in the housing market feeds into the narrative "we (the older generation) managed to buy houses easily enough because we worked so much harder than the young today". Total bs imo, the housing market was a lot different decades ago. My personal narrative is, "I operated in the world as I found it. Of course it was different. Better in some ways, worse in others. Millennials need to operate in the world as they find it."
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Steerpike
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Post by Steerpike on May 11, 2018 12:53:35 GMT
I think that for some of the older generation, young people having difficulty in the housing market feeds into the narrative "we (the older generation) managed to buy houses easily enough because we worked so much harder than the young today". Total bs imo, the housing market was a lot different decades ago. Without wishing to sound like a character from the Monty Python Four Yorkshiremen sketch... My first flat had a single cold tap and sink, no heating, no bathroom, and a shared lavatory down a flight of stairs. I lived there for a couple of years as frugally as I could working and saving as hard as I could including holding down 2 full time jobs for 6 months and eventually scraped together enough for a 5% deposit and a 95% mortgage on an estate semi somewhere I didn't want to live, couldn't afford carpets, curtains or furniture and had to sleep on a mattress on the floor when we moved in, but relieved to have made a start. Everyone knows that the housing market is now even more distorted but one does get the sense with some of the younger generation nowadays that they feel that they are entitled and don't need to take responsibility themselves.
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cb25
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Post by cb25 on May 11, 2018 12:56:17 GMT
Without wishing to sound like a character from the Monty Python Four Yorkshiremen sketch... You failed 
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jlend
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Post by jlend on May 11, 2018 13:29:48 GMT
The challenge is huge when I look at the IFS stats...
The falls in homeownership have been sharpest for young adults with middle incomes. In 1995–96, 65% of those aged 25–34 with incomes in the middle 20% for their age owned their own home. Twenty years later, that figure was just 27%.
Coupled with house price inflation that has outstripped wage growth, student debt, the requirement for larger house deposits and a lack of house building.... plus high rents making saving for a deposit hard....
It does feel like there is something structurally wrong but i don't know what can be done....
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invester
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Post by invester on May 11, 2018 14:16:19 GMT
Without wishing to sound like a character from the Monty Python Four Yorkshiremen sketch... My first flat had a single cold tap and sink, no heating, no bathroom, and a shared lavatory down a flight of stairs. I lived there for a couple of years as frugally as I could working and saving as hard as I could including holding down 2 full time jobs for 6 months and eventually scraped together enough for a 5% deposit and a 95% mortgage on an estate semi somewhere I didn't want to live, couldn't afford carpets, curtains or furniture and had to sleep on a mattress on the floor when we moved in, but relieved to have made a start. Everyone knows that the housing market is now even more distorted but one does get the sense with some of the younger generation nowadays that they feel that they are entitled and don't need to take responsibility themselves. Building standards mean that many of those hardships are not allowed. Looking at some of the standards of HMOs that some of the young live in, no doubt in 50 years time they will be recanting the 'how hard it was' tales to the young kids. One particular sad story I knew of is that someone had two full-time jobs and was still skint after rent, food and transport costs. I think one of the problems is that people see some young people being extravagant with money and then apply this to a generation. Looking at that particular generation, the differences between the haves and the have nots I don't think has been wider. Career progression can be very quick nowadays, whereas in the past it was more common to have to wait. So on the whole people may observe it everything to be the same I believe this to be a bit of an average. IMO those who 'have' have it much, much easier and those who 'have not' have it much, much harder. It's easier for the news headlines to not concentrate on those who are lower on the scale.
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ashtondav
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Post by ashtondav on May 11, 2018 14:34:29 GMT
1983 I paid interest of 13% on my 98% mortgage or £4,000pa (penal because of high LTV). Upgraded for inflation that would be about £12,000pa now. That would cover a £400,000 mortgage today. I realise the deposit would be an issue but hey, I’d have killed for a 3% mortgage!
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jlend
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Post by jlend on May 11, 2018 15:07:03 GMT
1983 I paid interest of 13% on my 98% mortgage or £4,000pa (penal because of high LTV). Upgraded for inflation that would be about £12,000pa now. That would cover a £400,000 mortgage today. I realise the deposit would be an issue but hey, I’d have killed for a 3% mortgage! Just to compare what first time buyers are typically able to afford now. Lots of stat's around. From Halifax for example for first time buyers. 33k average deposit. 212k average house price.
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cb25
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Post by cb25 on May 11, 2018 15:41:29 GMT
1983 I paid interest of 13% on my 98% mortgage or £4,000pa (penal because of high LTV). Upgraded for inflation that would be about £12,000pa now. That would cover a £400,000 mortgage today. I realise the deposit would be an issue but hey, I’d have killed for a 3% mortgage! But the main thing is that you did manage to buy a property. If interest rates alone were the key to affordability, we'd expect massively more home ownership (as a percentage of population) now - with our historically low interest rates - than ever before, but we don't.
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moogman
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Post by moogman on May 11, 2018 17:26:23 GMT
Anyone who thinks that taking money from one generation to give to another is going to "heal" anything is particularly naive. If anything the proposals will create more divisions. 26 year olds are going to be mighty p'd off. And to the entitled 25 year olds it won't be enough, nothing is ever enough. This is literally how social security, state pensions and free schooling works.
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Post by dan1 on May 11, 2018 18:26:59 GMT
or you drop dead before retirement age...
Yeah - my IFA said it was only worth topping up if it didn't drop you into basic rate tax I assumed this was written tongue in cheek (apologies!) but in all seriousness this is eminently sensible if you've a reduced life expectancy and/or looking to pass on your wealth. Similar in some respects to cashing in a DB pension should you be in the unfortunate position of receiving a terminal diagnosis.
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Post by lynnanthony on May 11, 2018 19:04:13 GMT
Anyone who thinks that taking money from one generation to give to another is going to "heal" anything is particularly naive. If anything the proposals will create more divisions. 26 year olds are going to be mighty p'd off. And to the entitled 25 year olds it won't be enough, nothing is ever enough. This is literally how social security, state pensions and free schooling works. Not the same.
Social security is a safety net for those as needs it.
State pension is everyone paying for oldies on the understanding (possibly misplaced) that it'll be there for us all when we need it.
Free schooling: I received it and I am thus happy to provide it for everyone else, plus there is an element of self interest involved in that I might need a lawyer or a doctor or a civil engineer at some time.
None of those is similar to extracting more from the oldies to give to all the young, for no apparent reason than they feel they are entitled to it.
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