At a big family get-together recently I got chatting with one of my second cousins who I hadn't seen for a while. Indeed the last time I saw them, their children were in their early teens. Now the children are all grown up with partners, children and even dogs of their own. Wow – how time flies!
So, I got talking over a glass of lemonade with my 2nd 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. Foolishly, I said with all the opportunities youngsters had to day, they never had it so good!
Trust one of my cousin’s children to have some financial / economics qualifications before going to Law School! They argued that the economic prospects of their Millennial generation was far worse than anything ‘we’ had experienced! After all they had to suffer student debt, unemployment, global proliferation, EU migration and rising house values. These issues combined created a negative outlook for ‘their’ generation, which has created 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 so many Brit’s would live as long as we do today. The modest retirement pensions that were promised in the past (be that Government State Pension or Company Final Salary Schemes), are now burdensomely over-lavish. Putting it simply they are ‘hurting’ the Millennials of today and will do so for the years to come
Bringing it back to property, the young 2nd cousin (once removed ‘soon to be’ lawyer), considered the baby boomers born between 1945 and 1965 as the significant beneficiaries of the rising house prices over the 1970’s / 80’s / 90’s and 2000’s. Add to that, their decent pensions, means their wealth has grown exponentially more through the luck rather than skill or endeavour of a generation.
This disparity of wealth between the older and younger generations could have unparalleled consequences for the living standards of younger Millennials…. So
Grantham – do we have a problem??
Well Grantham Property Blog 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 Grantham has risen from £57,900 to its current level of £169,200. Given there are a total of 10,425 homeowners aged over 50 in Grantham, that means there has been £1.15bn windfall for those Grantham homeowners fortunate enough to own their own homes during the property boom of the 1990s and early 2000’s.
I must admit the growth in property values in the 1990’s and 2000’s certainly helped many of Grantham’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 week, I will carry on this discussion where I will give the Baby Boomer’s defence to the prosecution’s case!