Redistributing wealth between the generations

Ditto gillybob. Many young people today leave university with debts, have zero hours contacts and either cannot afford to get on the housing ladder or struggle with eye wateringly high rents
I was interested to hear Martin Lewis's explanation of student loans on QT the other week.

www.moneysavingexpert.com/students/student-loans-tuition-fees-changes

margs rather a sweeping statement!
It certainly does not apply to my ACs and I'd hazard a guess that it's not applicable to all families!

Free education is the key. If nothing else children should be given as much help as they need, not as much as the parents are in a position to provide.

I am minded of the scene from Tale of Two Cities where the toff leans out of the carriage and throws some coins to the poor, and watches them scrabble for them. Divide and rule is certainly working on this thread! It would have made more sense if the discussion had advocated redistribution of wealth from the obscenely rich to the rest of us. And not just the pounds they own but the means of production too because you can't control what you don't own. The banks have been given 500 billion pounds of our money since 2008 and what's to show for it – underfunded schools and NHS, job insecurity, food banks, homelessness etc.

To the housing business. We have enough land (brownfield and non-starts plus empty properties) to provide 1.5 millions homes in the time it takes to build them – slightly longer for brownfield sites as they have to be 'made ready' sometimes. And the building societies have the funds to do this. But they're not building many really affordable homes. Better from their point of view to build luxury flats or sit on the land and bank it as an investment. There is a slight shortage of some materials at the moment but I personally think this would provide the incentive to try alternative construction methods – greener ones maybe?

I hope the next government will force construction of good quality homes for all immediately with penalties and possible nationalisation of their assets for any construction firms that drag their feet!

For youth – free education at all levels - like they have in Germany, Finland and those wealthy countries, Cuba and Chile! Free entry for us too.

This would be a start!

Ditto gillybob. Many young people today leave university with debts, have zero hours contacts and either cannot afford to get on the housing ladder or struggle with eye wateringly high rents. If I can afford to help my kids, I do.

The cost of childcare is very much taken into account by lenders when a mortgage is applied for ( as are a range of other household expenditures)

I would do anything in my power to help my children have a better life than I had. Why would we want our children to experience hardships that we have suffered. I pity a lot of young people today I really do.

My stingy old husband objected when I bought one son a ladder and a daughter a tumbler dryer, because although they are both reasonably well off they have stresses in their lives that I, poverty stricken though I was at their stage in life, and I MEAN poverty stricken did not experience. It's a completely different world now. We had secretaries, now professionals are their own secretaries and filing clerks, trying to work professional jobs in open offices with no peace or time to think. Then they go home to children reared in an excessively child- centred world with all their expectations to face. If I have enough hard- earned cash, and by hell I worked hard to earn it, and can cheer my kids up with a gift to make their lives easier I reckon it's a privilege to be able to do so.

Let’s not forget there are still areas in the U.K. (and even smaller pockets within those areas) where house prices have stood still and in some cases fallen. Our own house is worth exactly what we paid for it 7 years ago (at the most). So what would rising interests do for the young people living where I live? Except make it even harder and more impossible for them.
This situation needs to be looked at regionally or even more specifically than that. Suddenly raising interest rates will be making the very rich even richer and those struggling at the bottom even poorer.

Thanks Monica.
The picture is quite complicated though isn’t it?
The cost of rented accommodation must also be a factor in house prices - if it costs more to rent a property, then people will buy instead (assuming finance is available) which will drive up property prices. That was the main reason we bought our first house.
And if a couple are using paid childcare to allow them both to go to work, then that is effectively an overhead in the overall cost of buying the house and perhaps should be added to the mortgage costs when working out the proportion of income that is needed for house purchase.

janeainsworth, absolutely, but I do not propose it as a serious policy more as a hook to make many of those complaining about our 'good fortune' think a bit more carefully.

How much people can afford to pay in mortgage payments each month is defined by their income. When interest rates are high, as they were until about 1995-2000, the proportion of the monthly payment that is interest rises so reduces the amount left for capital payment and this drives house prices down. When interest rates are low the proportion of the payment that is capital payment rises, so prices rise as well.

I suspect that the proportion of monthly household income paid out in mortgage payments has changed very little over the years.

The basis of calculation of how much can be borrowed has also changed. When most of us married and bought homes the Building Societies, would generally only lend on one income - the mans, or if they would lend on a second income they would only lend on half of it. Also many women were not working and most were poorly paid. So household income was much lower, even in real terms than now.

Now with more women in professional work, more likely to be working full time and more likely to be having salaries close to men's salaries and with lenders lending equally on joint incomes, house prices have gone up to match the rising household income.

The comparison factors taken into account by those complaining about our 'good fortune' are facile and limited. Just price comparisons between when we first bought and prices now. They fail to account for interest rates levels and household income levels never enters into it.

This utter nonsense of pitting one generation against another is infuriating. Different times, different problems. I love the younger generation. They have skills I can barely imagine. And they have energy, make me laugh and are the future. Generally very respectful, too.

My parents sold their house in the late 60's whilst my DF was drafted abroad for a couple of years. They put the money in the bank but when they returned in the early 70's, house prices had risen so much they were unable to buy again for years. We lived in rented accommodation where nobody dared mentioned the subject of a house purchase for fear of the bitterness it would unleash.

Monica wouldn’t that result in the misery of negative equity for many people?

There is a simple way to sort out the rising house price problem. Increase the interest rate on mortgages to 10%, roughly the average interest rate most of us paid and watch the price of houses plunge.

You cannot have it both ways. Lower prices and sky high interest rates or negligible interest rates and sky high prices.

Margs wrote: "In other words, if you didn't have the cash to pay upfront then you had to wait and save."
Exactly.
Apologies for giving examples from France ( we've recently left) but there you can't get a credit card easily, only a debit card. And if you overdraw, they close your account. News goes round and no other bank wants to know you.

The youngsters spend, spend, spend - using credit cards galore! Then when the statements arrive and they realise that these bits of plastic cards translate into hard cash which the banks are demanding, they start to whine and panic and naturally turn to the Bank of Mum & Dad.

Back in the day, there were no such things as credit cards and shops had discreet notices that said "Please Do Not Ask For Credit As Refusal May Offend". Apart from the old fashioned Hire Purchase method of buying large household items, credit was hard to find.

In other words, if you didn't have the cash to pay upfront then you had to wait and save.

No putting things on plastic because you were so impatient you wanted it yesterday!

There's a lot of (hard) growing up for the youngsters to do.....

Of course there are some with an over-entitled attitude, but OTOH it's fair to say that expectations do change - things one generation may regard as luxuries are fairly normal to the next.
Take telephones (landlines) - or radio or TVs, or vacuum cleaners or automatic washing machines. Far from standard for many of our parents/grandparents once.

My granny (she would have been about 130 now) had 5 children, and once told me how she'd asked her own mother - who had 10 and wasn't really poor by standards at the time - how on earth she'd managed without a pram.
'I used my arms.'

Yes, really, maddyone - I hope you weren't thinking that I made that up!
Obviously it won't apply everywhere by any means - the example I quoted is in Oxford, and in far from the priciest part. Oxford prices are stupidly expensive, though still quite a way off London. But beginning - slowly - to come down a bit, I think.

JenniferEccles wrote
"Why do we now have this young generation with such an aggrieved attitude?"
Because they've been brainwashed by the media to expect that they're entitled to a certain standard of living which in most cases is unrealistic.
Many of them, not all.

I also hate this bitterness from some youngsters towards our generation. Where did it all come from?

We struggled to get our first home, but achieved it by living with our respective parents when we were engaged, saving hard for the deposit for a terraced house on a new housing estate. We then got a mortgage, bought the house, got married, then had the children. Note: In that order!!

Although it was a struggle for us at first I didn't feel the slightest resentment towards my parents or in laws in their lovely paid-for detached houses. They (and my grandparents) in their time also had to work, save hard and do without to be home owners.

Why do we now have this young generation with such an aggrieved attitude?

I hate all this pitting of one generation against another. No mention of the bankers, the wealth held by a tiny minority, unequal government housing policies or greedy landlords. Not all baby boomers are wealthy, there is plenty of pensioner poverty and people having to work into their 70s because of inadequate pensions. Yes I live in a 4 bedroom house, but I didn’t start off in one and I guess in 30 years time someone who is now in their 20s or 30s will be living in it.

It is true that many of us struggled and went without in order to buy our homes but at the same time there were those of our generation who didn't save, had nights out, had holidays and gave no thought for their future. I think the same is true of the younger generation, some work and save hard, some don't.

There are some who appear to have an entitled attitude, I am reminded of a young man I heard on local radio a little time ago, he was advocating that all "old" people should sell their houses and donate the money to students, not just to their own children or grandchildren, so they would not be in debt when they leave university. He had no thoughts as to where these "old" people would live or how they would support themselves! I prefer to think that he was not representative of the majority of younger people!

We help not wenhelp. No edit button! Sorry.

I read the article and it is nonsense. If Tim Harford wants to be given money he can go out in the streets and beg for it. Of course the mid life period is stretched and difficult as it is then that people are juggling jobs and families at the same time. If this looks too hard then avoid the family route. Those of us who are older also went though this testing time without whingeing or expecting others to cough up.

That said, I never stopped being prudent, economising and saving and if Tim thinks I was doing this to hand over my hard saved cash to fund his splurging I will point out that my prudence was intended as a safety net for my old age.

Yes, I have a house but recently it needed roof repairs, the replacement of a rotten sill and the bare woodwork upstairs painting (I did downstairs myself). This essential work cost over £1200 and as I am on a pension it had to come from savings.

I think Willetts and his intergenerational envy rabble rousing is intended to split the age groups and set them against each other so the government can raid even more of hard earned, tax paid cash. We must resist. After all the young are our children and grandchildren and if wenhelp them out they get the money and the inheritances but if the government gets it they will waste it for sure.