Recently I was having a chat with one of my cousins at a family
get-together. The last time I had seen them their children were in their early
teens. Now their children are all grown up, have partners, dogs and children.
Wow – how time flies!
So, I got talking over a glass of lemonade with my
cousins and a couple of their children, about the times of 15% interest rates
and how the more mature members of our family had to endure the 3 day week, 20%
inflation and the threat of nuclear annihilation in 4 minutes .. so, foolishly,
I said what with all the opportunities youngsters had today, they had never had
it so good!
Trust one of my
cousin’s children to have gained some financial/economics qualifications before
going to Law School, as they debated with me the genuine economic predicament
of Millennials and how a combination of student debt, unemployment, global
proliferation, EU migration and rising house values is reducing the salaries
and outlook of masses of the UK’s younger generation, causing an unparalleled disparity
of wealth between the generations. So of course I asked why that was?
They said Millennials
were paying the price for the UK’s most spectacular bookkeeping catastrophe to
date (bigger than the Bank bailout after the Credit Crunch). Back in the 1950’s
and 1960’s, nobody predicted us Brit’s would live as long as we do today, and
in such abundant numbers. The OAP pensions that were promised in the past (be
that Government State Pension or Company Final Salary Schemes) which appeared
to be nothing fancy at the time, are now burdensomely over-lavish, and that is
hurting the Millennials of today and will do so for years to come.
Bringing it back to property, the young cousin ‘soon to be’ lawyer,
stated that baby
boomers born between 1945 and 1965 have been big recipients of the
vast rising house prices over the 1970’s/80’s/90’s and 2000’s. Add to that
their decent pensions, meaning cumulatively, their wealth has grown
exponentially through no skill of their own.
This disparity of wealth between the older and younger generations could
have unparalleled consequences for the living standards of younger Millennials….
So Houston Dartford – do we have a problem??
Well Dartford Property Report readers, you know I like a challenge. I
can’t disagree with some of what the younger family member said, but there are
always two sides to every story, so I thought I would do some homework on the
matter ..
Since 1990, the average value of a property in Dartford has risen from £81,000
to its current level of £333,700. As there are a total of 23,650 homeowners
aged over 50 in Dartford; that means there has been a £5.98bn windfall for
those Dartford homeowners fortunate enough to own their own homes during the
property boom of the 1990s and early 2000’s.
I must admit that the growth in property values in the 1990’s and 2000’s
certainly helped many of Dartford’s baby boomers. The figures do appear to put
into reverse gear the perceived wisdom that each generation gets wealthier than
the previous one … and so with all this
wealth, the figures do back up the youngsters argument that Millennials are
being priced out of home ownership.
Or do they? Are they?
Next month, I will carry on this discussion where I will give the Baby
Boomer’s defence to the prosecution’s case!
