Have the Baby Boomers (people between the ages of 55 and 75) messed things up for the Millennials in terms of getting on the Ashford property ladder? Many bought their council houses in the 80’s and 90’s, leaving no affordable homes for today’s youngsters, thus driving up the demand for rental homes and the price of homes (making them unaffordable). So, I decided to look at the figures, which do not make for good reading.
In 1980, the average Ashford household income was just under £6,000 per annum and the average Ashford house price was £24,497; whilst today, the average Ashford household income is £33,072 per annum, yet the average home’s value is now £335,600, meaning…
The average Ashford home’s value was 4.08 times the average household income in 1980 compared to 10.15 times today
… it’s no wonder then that Millennials are pointing the finger at Baby Boomers!
And the problems don’t just stop there. Not only do the newspapers state there is a housing crisis of affordability, but also a crisis of the availability of homes for people to live in. The political parties using housing as a ‘vote winner’ mentioned stats such as in 1981 there were 5.1 million council houses and today that stands at 1.6 million. This is important because, as a substantial number of people will never be able to afford to buy, social housing plays a significant role in homing them.
It all looks rather damning and the phrase ‘OK Boomer’ looks quite apt.
(‘OK Boomer’ become fashionable as a way of claiming that things were “easier in the past”, yet it has now become just a way for younger people to discredit the views of older people).
Well, checking the stats, the political parties seemed to forget the number of housing associations homes (which are also social housing) has risen from 0.4m to 2.6m homes in that time, therefore, whilst there is a drop in social housing, it’s a net figure of 2.3m fewer social-rented houses, instead of the 3.5m in the paragraph above.
Baby Boomers simply did the best they could with the circumstances given – it’s not like that these older generations have been conspiring in the food aisles of Waitrose or M&S on how to mess things up for the next generation. There are fundamental underlying problems in British society that means things are difficult for our younger people – it’s everyone’s responsibility to solve those underlying problems – we can’t just blame the Baby Boomers. Millennials aren’t morally superior to Baby Boomers just because they didn’t grow up in the same era of economic growth and house price inflation.
What some people seem to forget is whilst Ashford property values were lower in 1980, so were salaries – The true mark of home affordability are mortgage rates – Assuming someone bought an average property in 1980 and again in 2019, using a 95% mortgage at the prevailing mortgage rate of 17.8% in 1980 and the current 1.65%, today in Ashford the mortgage accounts for 47% of the household income (assuming a single income) compared to 69.9% in 1980. This has to be one of the main reasons why many families became two wage households in the late 70’s/early 80’s as housing affordability was diminished with eye-wateringly high interest rates.
Things were actually much tougher for homeowners in 1980….
The real issue here is something much deeper: Baby Boomers say it is Millennials’ own fault they can’t afford to buy their own home because they spend their money on three annual holidays, avocado on toast, going out several times a week and buying the latest iPhone or suchlike whilst Millennials accuse the Baby Boomer generation of ruining the housing market ‘per se’ by being selfish. Both are right and both are wrong.
In my own involvement with friends and family, many Ashford Baby Boomers are trying their best to help out their now grown up children with a deposit. They are fully aware of current Ashford house prices compared to when they bought their own homes.
I am not a fan of attaching labels, be it Millennials, Baby Boomer or Gen-X. It’s really a point of attitude, behaviour and circumstance rather than simply your birthdate. Every generation has its share of feast and famine and whilst, given the title of this article, I appreciate the irony, let’s stop labelling people and making assumptions, we need to understand each generation’s issues and be more forgiving.