Boomer life according to the economist
Discussion
House prices are not complicated, it's simply supply and demand. There isn't enough supply being built (although there is more housebuilding around me now than I've ever seen before, which is a good thing), and an increasing demand due to population growth, and more people living in single person households.
There was an excellent report written when Gordon Brown (I think, maybe Blair?) was PM about how to fix the housing problems, but it's been almost entirely ignored by governments since then.
It's worth a read, here is Home Builders Federation's take on it 20 years later and the original document below.
https://www.hbf.co.uk/news/20-years-of-wasted-oppo...
http://news.bbc.co.uk/nol/shared/bsp/hi/pdfs/17_03...
There was an excellent report written when Gordon Brown (I think, maybe Blair?) was PM about how to fix the housing problems, but it's been almost entirely ignored by governments since then.
It's worth a read, here is Home Builders Federation's take on it 20 years later and the original document below.
https://www.hbf.co.uk/news/20-years-of-wasted-oppo...
http://news.bbc.co.uk/nol/shared/bsp/hi/pdfs/17_03...
Interesting the views on the money given out not being a good idea/sustainable. Just for reference the sum I gave was around 50% of the price of an average house, and 50% was the price given as the discount boomers got on buying their council house back in the day if you owned it long enough. Which was a lot of the population.
98elise said:
NRS said:
A good policy could be to give Millenials and younger a £140 000 grant from the government to help with house purchases to balance things up.
Where does the money come from?Also housebuilders see their profits jump by £140,000 per house due to market demand.
Boomers and CEO of housebuilders all get rich. Inflation goes up.
Millenials have paid £140,000 more for their houses and now have higher UK debt to repay over their remaining working lives.
Gary C said:
In my experience, Gen X are ok.
If employed by the public sector or where they've invested in property - agreed. And the odd very successful self-employed person.For the rest of us, DC pension schemes and a lack of proper pensions advice* in our 20s was a killer. Out of my circle, the above categories are the only ones (bar a couple of very successful execs, but that's top-1% territory) who will be able to retire early. And if you look at the statistics on public sector e'ees (<20% of population), landlords (1-2% ?) and very successful self-employed (another few %?), you're talking maybe 1/4 of Gen-X.
* Off the back of the demise of DB schemes, I think a lot of the industry stuck their heads in the sand as to how bad DC schemes were going to be in comparison. Not deliberately bad or missing advice, just a lot of ignorance about the consequences.
leef44 said:
QE. Money floods into the UK economy. Millenials buy Boomers' houses who start selling as their house price go up by an average of £140,000 due to market demand.
Also housebuilders see their profits jump by £140,000 per house due to market demand.
Boomers and CEO of housebuilders all get rich. Inflation goes up.
Millenials have paid £140,000 more for their houses and now have higher UK debt to repay over their remaining working lives.
Also housebuilders see their profits jump by £140,000 per house due to market demand.
Boomers and CEO of housebuilders all get rich. Inflation goes up.
Millenials have paid £140,000 more for their houses and now have higher UK debt to repay over their remaining working lives.
100% this.Y'know, it's almost like arguing on the internet DOESN'T WORK. You come out with logic after logic, reasoned argument and evidence of the failure of previous policies, and yet people keep saying the same s
t as if you weren't there...Condi said:
House prices are not complicated, it's simply supply and demand.
Precisely. All you need to do is look at the basic arithmetic. Net immigration far exceeds new home builds. Then add in the natural population growth. There's only ever going to be one direction of house prices while this continues.
Meanwhile the bankers/mortgage lenders sit back and congratulate themselves upon how their great business acumen is "adding value" in the economy...
Panamax said:
Meanwhile the bankers/mortgage lenders sit back and congratulate themselves upon how their great business acumen is "adding value" in the economy...
In my experience a lot of salespeople / execs easily confuse luck with ability. Think it's something to do with ego / sociopathy.havoc said:
Gary C said:
In my experience, Gen X are ok.
If employed by the public sector or where they've invested in property - agreed. And the odd very successful self-employed person.For the rest of us, DC pension schemes and a lack of proper pensions advice* in our 20s was a killer. Out of my circle, the above categories are the only ones (bar a couple of very successful execs, but that's top-1% territory) who will be able to retire early. And if you look at the statistics on public sector e'ees (<20% of population), landlords (1-2% ?) and very successful self-employed (another few %?), you're talking maybe 1/4 of Gen-X.
* Off the back of the demise of DB schemes, I think a lot of the industry stuck their heads in the sand as to how bad DC schemes were going to be in comparison. Not deliberately bad or missing advice, just a lot of ignorance about the consequences.
Fortunately I can afford this and still have disposable income to enjoy. Had I paid in 8% from the age of 17 my pot would have been much much larger.
Determined to not be a wage slave for my whole life. And if I die early at least the wife won't have to be a wage slave.
Lack of knowledge around pensions, and the importance of compound growth is staggering. For reference I'm a 'mellenial'.
There seems to be a wide assumption that DB pensions and huge house price gains have benefited all boomers, or at least a large proportion of them.
The natural result of this would of course be a comfortable and early retirement.
But according to this a third of boomers will retire over 4 years after the state pension age and the average retirement age for that generation is over 63 years old.
https://www.ftadviser.com/pensions/2022/03/28/over...
By comparison the average now is only 65 for men and 64 for women. It probably will keep extending to late 60s by the time millennials retire but at the same time life expectancy has gone up around a decade even since genX were born so average time in retirement is going up rather than down.
Obviously nobody wants to have to retire later but the difference over a 50 year period is relatively small and probably not a bad situation for millennials and genZ given the advantages they also have, not least the information available to help them change their individual situations.
The natural result of this would of course be a comfortable and early retirement.
But according to this a third of boomers will retire over 4 years after the state pension age and the average retirement age for that generation is over 63 years old.
https://www.ftadviser.com/pensions/2022/03/28/over...
By comparison the average now is only 65 for men and 64 for women. It probably will keep extending to late 60s by the time millennials retire but at the same time life expectancy has gone up around a decade even since genX were born so average time in retirement is going up rather than down.
Obviously nobody wants to have to retire later but the difference over a 50 year period is relatively small and probably not a bad situation for millennials and genZ given the advantages they also have, not least the information available to help them change their individual situations.
havoc said:
Gary C said:
In my experience, Gen X are ok.
If employed by the public sector or where they've invested in property - agreed. And the odd very successful self-employed person.For the rest of us, DC pension schemes and a lack of proper pensions advice* in our 20s was a killer. Out of my circle, the above categories are the only ones (bar a couple of very successful execs, but that's top-1% territory) who will be able to retire early. And if you look at the statistics on public sector e'ees (<20% of population), landlords (1-2% ?) and very successful self-employed (another few %?), you're talking maybe 1/4 of Gen-X.
.
My first house was £25000 in 1990, it was £25000 when I sold it in 1996 (
), in 2001 it was up for sale at £80000I don't think anyone is saying "all" because as the article makes clear less than half have a DB pension.
Those that do though are very lucky as they're next to impossible to get these days outside of the public sector precisely because the terms are typically so generous.
I think what people are suggesting is that there's a bit of "pulling the drawbridge up" to anyone sitting in retirement in a house purchased in the 70's living off a gold plated DB pension telling "kids today" to just do more hours and work harder.
Those that do though are very lucky as they're next to impossible to get these days outside of the public sector precisely because the terms are typically so generous.
I think what people are suggesting is that there's a bit of "pulling the drawbridge up" to anyone sitting in retirement in a house purchased in the 70's living off a gold plated DB pension telling "kids today" to just do more hours and work harder.
Gary C said:
I suppose Gen X covers a period with significant change. Age 21 from 1981 to 2001 covers the period of huge change. Those of us in the first part probably had it easier than the later.
My first house was £25000 in 1990, it was £25000 when I sold it in 1996 ( ), in 2001 it was up for sale at £80000
I'm pretty much in the middle of the Gen X age cohort.My first house was £25000 in 1990, it was £25000 when I sold it in 1996 (
), in 2001 it was up for sale at £80000Looking at people slightly older/younger than me, the defining thing financially is how their age and early career (university or not, buy a house early or late) related to the 1991 economic/employment slowdown and subsequent housing slow down/price falls.
Where you were in your life "stages" during that can easily make a multiple hundreds of £K difference to where you now stand financially.
bhstewie said:
hstewie said: I don't think anyone is saying "all" because as the article makes clear less than half have a DB pension.
Those that do though are very lucky as they're next to impossible to get these days outside of the public sector precisely because the terms are typically so generous.
I think what people are suggesting is that there's a bit of "pulling the drawbridge up" to anyone sitting in retirement in a house purchased in the 70's living off a gold plated DB pension telling "kids today" to just do more hours and work harder.
Yep, that’s fair, the first part at least. Those that do though are very lucky as they're next to impossible to get these days outside of the public sector precisely because the terms are typically so generous.
I think what people are suggesting is that there's a bit of "pulling the drawbridge up" to anyone sitting in retirement in a house purchased in the 70's living off a gold plated DB pension telling "kids today" to just do more hours and work harder.
But I think the overall picture is that everyone needs to take a bit of the rough with the smooth rather than just banging on about pensions and house prices when millennials and genZ have many advantages that balance that out (longevity, technology, inside toilets, no mines to work down etc).
bhstewie said:
hstewie said: I don't think anyone is saying "all" because as the article makes clear less than half have a DB pension.
Those that do though are very lucky as they're next to impossible to get these days outside of the public sector precisely because the terms are typically so generous.
I think what people are suggesting is that there's a bit of "pulling the drawbridge up" to anyone sitting in retirement in a house purchased in the 70's living off a gold plated DB pension telling "kids today" to just do more hours and work harder.
Who's pulling the drawbridge up, it's certainly not the nation's DB pension recipients and long-term home owners en masse...try politicians. They'll all make a fuss over 'doing something' because 'something must be done' without pointing out that it was their predecessors whose similar levels of incompetence are at the core of problem chickens coming home to roost. If they can point a finger at a scapegoat, they will, it'll work too with some people, see posts in this thread ^Those that do though are very lucky as they're next to impossible to get these days outside of the public sector precisely because the terms are typically so generous.
I think what people are suggesting is that there's a bit of "pulling the drawbridge up" to anyone sitting in retirement in a house purchased in the 70's living off a gold plated DB pension telling "kids today" to just do more hours and work harder.
In passing, there's nothing wrong with instilling a work ethic, it's likely to be far more successful than foolishly relying on any politicians of any flavour. That's always been silly and a dangerous strategy.
Gary C said:
I suppose Gen X covers a period with significant change. Age 21 from 1981 to 2001 covers the period of huge change. Those of us in the first part probably had it easier than the later.
My first house was £25000 in 1990, it was £25000 when I sold it in 1996 ( ), in 2001 it was up for sale at £80000
Fair point. I'm well into the second half of Gen-X, as are (almost) all of my circle. Didn't buy my first house until (I think) 2000, and then arguably in the wrong area to benefit from the first wave of price-growth. Been playing catch-up on that front ever since.My first house was £25000 in 1990, it was £25000 when I sold it in 1996 (
), in 2001 it was up for sale at £80000Pension-wise literally no-one* explained it to me until I started researching it myself in my very late-20s (I'd been taught the accounting principles for DB schemes, but that's totally different). At which point I was stretched for mortgage and didn't want to make it worse, so I probably didn't start putting proper contributions in until maybe mid-30s. Not helpful in hindsight...had this naive thought that I'd have more disposable income as I got older...then we had kids!
Don't get me wrong - I've enjoyed a decent life...just need to accept that over the next 20 years I'm going to pay the consequences for my decisions when younger. Which is sort of why I'm defensive of the younger generations - they're going to get it tougher than me, being really squeezed to afford property while (actually being told) they also need to put away for retirement as early as possible. All in their 20s when they probably just want the opportunity to have a little fun like we did - y'know, holidays with mates to the Med, mucking around with cars, going clubbing/gigging**.
* Why would they? Half of society was still enjoying DB schemes and when I started work they were still open if you joined a big corporate, and a DB scheme was all you needed to be able to retire comfortably. The penny was a long way from dropping.
** Hasn't that got expensive now?
havoc said:
Don't get me wrong - I've enjoyed a decent life...just need to accept that over the next 20 years I'm going to pay the consequences for my decisions when younger. Which is sort of why I'm defensive of the younger generations - they're going to get it tougher than me, being really squeezed to afford property while (actually being told) they also need to put away for retirement as early as possible. All in their 20s when they probably just want the opportunity to have a little fun like we did - y'know, holidays with mates to the Med, mucking around with cars, going clubbing/gigging**.
I wonder if you could could give us a number of the cost of the decent living. The exact issue of the following generations is that decent live and creating fortunes don't go well together.
Panamax said:
Condi said:
House prices are not complicated, it's simply supply and demand.
Precisely. All you need to do is look at the basic arithmetic. Net immigration far exceeds new home builds. Then add in the natural population growth. There's only ever going to be one direction of house prices while this continues.
Meanwhile the bankers/mortgage lenders sit back and congratulate themselves upon how their great business acumen is "adding value" in the economy...
When I got my first mortgage in the 90s you could borrow 3.5x salary and that was it.
The early 2000s gave us interest only mortgages, self certification mortgages (“liar loans”) and the explosion of BTL.
If credit has been as restricted as it was back in the day surely it would have kept a lid on house price inflation?
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