The comedian George Carlin was unforgiving in his disdain for people like me: “The Baby Boomers,” he said, “[are] whiny, narcissistic, self-indulgent people with a simple philosophy: ‘Gimme that! It’s mine’.” While this might be a crude and not entirely accurate dismissal of an entire generation, he’s not completely off the mark, and there is one thing we can all agree on: we were born lucky.
Those of us who were born between the late 1950s and early 1960s have lived, mainly, through an era of peace and prosperity, of opportunity and security, of free love and home ownership. And, now, we have bequeathed to our children a world riddled with threat and insecurity, and with that fundamental of economic self-determination – owning their own home, something we took for granted – becoming an ever more distant prospect.
It’s not our fault. Luck is not a sin. But denial of it is. And if we are to have a legacy beyond being the cipher of an age of selfishness and consumption, we must be open to finding a way to rebalance power (particularly financial power), and to help create a society that is more equitable for the generations that follow.
The question of housing is especially pertinent. A study released today by estate agents Savills reveals that 55 per cent of homeowners in the UK are aged 60 or more, while those under 40 make up just 10 per cent. Including second homes and buy-to-let properties, some £3.84trn of the UK’s property wealth is in the hands of the over-60s, a total that has increased greatly in recent years as mortgages have been redeemed.
It lays bare a generational divide that is unhealthy for society and unfair to younger people. Owning property has hitherto been the main engine of wealth accumulation in the UK, but now youngsters are trapped in a cycle of increasing rents, unaffordable mortgages and rising prices. I bought my first house at the age of 22 – even my meagre wages at the time allowed me to get on the property ladder – and have owned properties ever since. Today, the UK’s under-30s own just 2 per cent of total housing wealth.
Other than a wholesale re-ordering of our economic base, it is difficult to know what can be done to alleviate this situation. Property analysts are urging downsizing for older people who are “over-housed” (or live in houses that are “under-occupied”) to help unlock housing wealth, but this idea is fraught with practical and psychological and financial difficulties.
For a start, those who own big houses and might be attracted by downsizing are reluctant to do so while house prices are depressed. They’ve lived through an era of unprecedented inflation in the property market, and they don’t naturally see why they should sell at a time when their house is worth less than it once was (even though that’s massively more than they paid for it).
The second problem is the lack of available stock. The UK has a chronic housing shortage, especially in high-demand areas like the South East. And this particular situation is not helped by the humble bungalow – favoured by less spritely homeowners – falling dramatically out of fashion: 35 years ago, about 11 per cent of all homes built in the UK were bungalows, but today this is less than 1 per cent.
And then there is the psychological issue. Downsizing is no small thing: it’s an admission that you’re in your sunset years (something none of us wants to recognise). And for most of us, a home is not just an asset but a place full of memories, identity and shared experiences. Asking people to leave the house they may have lived in for 30 or 40 years is not a trivial request. What’s more, the idea that they should move home to recycle wealth sits uneasily with the notion that a home is a private asset and is to be used as the owner sees fit.
Nevertheless, downsizing is part of the answer to a critical housing problem that is unfairly afflicting post-boomer generations. We need to build more houses, too, but encouraging downsizing can become government policy. Reducing stamp duty for those seen to be buying smaller houses, financial incentives for older movers, that sort of thing. But, most importantly, by making it policy, this trend will become a social norm.
Eventually, empty nesters with big houses will be thought of as socially unacceptable, frowned upon like the owners of Lamborghinis or crocodile handbags. That is the best way to encourage social change, narrow the generational wealth gap, and make this a fairer country. Ok, boomers. It’s time to do our bit.
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