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Generation Rent.

Minivanman
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Generation Rent.

In between the Boris bashing articles in the Guardian there was one earlier highlighting the growing concern that generation rent millennials will not be able to afford a home of their own once they retire.

Like many mortgage paid pensioners I do not have the extra worry about having to pay rent, but knowing just how much it would cost find it hard to imagine how anybody could - even if they had a half decent pension. 

It is a worry, and although out of my four children two have mortgages and another owns outright, one pays rent with little hope of the situation changing.

Equity release on our home would help with a deposit for one, but would that be fair on the other three.

 


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gleneagles
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Re: Generation Rent.

I wonder why the cost of property go so out of line with wages ?

Even more odd if you were paying a mortgage around the same time as me then the intrest rate would have been much higher than it is today so that adds to the puzzle.

I expect part of the answer is allowing people to buy property as an investment, that is wrong in my opinion as it forces prices up.

Over the years we have had both Tory and Labour governments in power for long periods yet neither has taken any action to address this problem.

@Minivanman 

Think about how much you paid for your first house and how much that same house would cost you today.

If you had the amount of money that house costs today back then you could have purchased the whole street or a good part of it !

That illustrates to me how house prices have increases.

You mention retirement, if things continue as they are only the rich will be able to retire, for most it will be a distant dream, most of the so called perks the elderly get today will be gone and it will be impossible to exist on a basis state pension, even those who own property will be forced into  these equity deals to survive or give their property to the council if they need care in a nursing home.

Welcome to the future

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TTman
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Re: Generation Rent.

@gleneagles Well thats cheered me upEvil

Minivanman
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Re: Generation Rent.

Not in all cases, but how much I wonder has this to do with having children before having somewhere to live, compounded by fewer being able to make provision for their old age. The boomer generation have their houses to fall back on, the millennials without a house of their own will having nothing and be at the mercy of the market.

It's not looking good for a lot of kids that's for sure.

 


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ffox
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Re: Generation Rent.

I've done on bit of research on house prices. Looking at the Nationwide graph the 2 big rises were during the reigns of Margaret Thatcher and Tony  Blair; there was a significant drop when John Major was in power.  I wonder why?

 

 

House-prices-1975-2006.jpg

 

 

 

 

 

 

 

gleneagles
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Re: Generation Rent.

I was born in 1945.

Looking back at past generations and in particular those who lived through the last 2 world wars and looking at what the future seems to hold for those born in recent and not so recent times I consider myself fortunate to have lived in what is likely to prove the best period to have been living in.

Perhaps some will disagree depending on individual circumstances but even so whatever problems you might have consider how worse they might have been if you lived in a different era.

We are born into history and history is born into us.
gleneagles
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Re: Generation Rent.

@ffox 

Good question, one guess might be that people were skint during the time Major was in office and if no one buys property the price comes down.

As stated this is a guess, I have nothing to back it up !

We are born into history and history is born into us.
Minivanman
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Re: Generation Rent.

I bet if you overlaid that with say earnings they would be very similar.

Earnings bomb dropped in the 90's and did not start to rise until around 2000 so not sure we can draw any conclusions from which political party was running things. From my own experience, when I sold up and moved once the kids had all but left home house prices had been flat for years and only started to rise again afterwards. Story of our lives I guess but it did turn out to be the best thing that ever happened as the mortgage was paid off, what was left was invested in a renovation project and the rest as they say is history.

If I had stayed in the UK that mortgage would still be hanging heavy and for another two years and instead of being able to retire at sixty, I'd have been in hock until the age seventy five.... if I'd lasted that long.     


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idonno
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Re: Generation Rent.

I don't know too much about other areas but certainly affordability seems to be a major problem in London and the SE. Elsewhere, I don't think so. Yes, you do have to save up more, simply because of restrictions on affordability set by the banks etc. Round these parts (Lincolnshire) provided you have a job, buying a house is certainly affordable.No job, yes well. Not much has changed over the years. And of course with rock bottom interest rates, why not buy a house.

 

I'd certainly agree it should be made more difficult for foreigners (who don't actually live here) to buy property. Currently, we seem to have an open house, unlike other countries. I know there was talk way back in 2017 of extra restrictions but haven't heard anything since.  

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Champnet
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Re: Generation Rent.


@ffox wrote:

I've done on bit of research on house prices. Looking at the Nationwide graph the 2 big rises were during the reigns of Margaret Thatcher and Tony  Blair; there was a significant drop when John Major was in power.  I wonder why?

One of Maggie's policies created an unnatural boom in the demand for property forcing house prices to rise considerably.

 

wotsup
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Re: Generation Rent.

After the stock marked crash in 1987/88 people no longer trusted stocks and shares and started investing in property, this happened simultaneously pretty much in every developed country, and was no doubt the start of the housing costs going out of synch with wages, add to that Thatcherism previously selling off council housing stock at knock down prices.  Houses became not somewhere to live but a commodity to be bought and sold or rented out for maximum profit.  Holiday homes and buy-to-let still biggest part of problem.  Holiday homes inflate property prices in out of the way places and prevent people born locally getting a house,  buy-to-let are similarly distorting the market.  A house has never been easy to buy,  but during 1970's and 80's wages were rising faster than house prices so people took on big mortgages knowing that with inflation and wage rises they would soon become 'more affordable' in real terms. You have to say that buying a house is about and always has been about making sacrifices on other things, depends if you are willing to do that - I know people in their 20's working hard to buy houses..

 

Young people today more likely to get cars on PCP or lease or whatever rather than buying,  maybe this mindset also applies to houses as well...

Minivanman
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Re: Generation Rent.

Bricks and mortar were always going to be a better bet than stocks and shares unless you really did know what you were doing, how to short sell... and how avoid buying Chinese.

Stock market regulation? Yeh right. 

Watched this just recently on Netflix.

As for the the increase in stabbings well I have my own views on why... and it's in the shape of an elephant.

  


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7up
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Re: Generation Rent.


@Minivanman wrote:

Equity release on our home would help with a deposit for one, but would that be fair on the other three.


Would it be fair to let that one member of your family continue struggling while the others have a better standard of living?

That's the real question you should be asking yourself.

If the others don't like it then tough. Family is family. Yes they may have had to work their butts off to buy their own but nobody should ever begrudge someone else a home - especially when they themselves own one.

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Jonpe
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Re: Generation Rent.

The abolition of double mortgage interest tax relief (1987?) resulted in a rush to buy, which fuelled house price inflation.  Until then a couple buying jointly could each claim tax relief on the interest on £30,000 of their mortgage.  The chancellor announced in his spring budget that this would change in August so that tax relief would only be given on the interest of £30,000 per mortgage.  Naturally there was a rush to complete purchases by the deadline, and there were reports of couples phoning estate agents and buying flats unseen just to get on the ladder.  Many couples bought studio flats and other very small properties so as not to lose out, then split up but were unable to sell up and move since a subsequent dip in house prices had left them in negative equity.  Being forced to live with your ex in a very small flat isn't exactly ideal.

Minivanman
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Re: Generation Rent.

@7up 

Well not struggling at the moment, but just concerned about not having anything to fall back on when retirement is around the corner or the world goes pear shaped in the meantime.

Points take though. Thumbs_Up


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