“Britons between 18 and 29 have less left over after housing costs than older generations had at same age”

“In an inaugural national audit of intergenerational spending power, which is likely to reignite tensions between young and old, the Resolution Foundation thinktank concludes that today’s 18- to 29-year-olds are also spending less on shoes and clothes, hobbies and travel in real terms than those at the same age in 2001 as housing costs have soared. Compared with people the same age at the turn of the millennium they are 7% poorer in real terms, after paying rent, or if they can afford it, mortgage dues.

Meanwhile, in a story that will be familiar to the rising millions of twentysomethings who can’t afford to move out from their parents home, baby boomers have cranked up their spending on fun, laying out more on recreation, restaurants, hotels and culture, as people aged 65 and over have enjoyed a steep 37% rise in spending power compared with the same generation in 2001.

The audit is published by the Resolution Foundation’s new Intergenerational Centre, which is led by the former science minister David Willetts, and it said the findings debunked “the idea that young people are devoting growing pots [of money] to eating in restaurants and cafés (be that those that serve avocado on toast or others) or flying abroad”.

The proportion the young spent on fuel and groceries was up two percentage points while their spending on recreation and culture was down two points, the share spend on restaurants and hotels was down one point and clothing and shoes down two points. The 65s and over spent three percentage points less on groceries, two percentage points more on restaurants and hotels and three percentage points more on recreation and culture.

“The clear picture in terms of day-to-day living standards as measured through household consumption is of generational progress for older generations, and generational decline for younger ones,” the report said.

A spokesman for Generation Rent, which represents young people who have been priced out of homeownership, said in response to the report that “resentment is growing” and the founder of the Intergenerational Foundation, which promotes the interests of younger generations, accused older people of “breaking the social contract”.

Far from wasting potential housing deposits on fripperies, as suggested in 2017 by one millionaire property developer, millennials have been obliged to allocate a greater proportion of any money left over after housing costs to groceries, utilities and education. In 2018 they spent £380 a week on non-housing items on average – 7% less in real terms than they would have done at the turn of the century, analysis of official figures showed. At the same time the spending of people aged 50-64 rose 11% to £460, and pensioner spending rose to £390 a week.

The audit also assesses sharp increases in housing costs, cuts to in-work benefits, stagnant pay since the financial 2008 financial crisis and widening gaps in absolute wealth between young and old as key factors in one of the biggest social changes of this era.

Half a million more twentysomethings are living at home than would have been the case if the pre-crisis trend had not been disrupted, the report found. In 2007, half of 21- to 24-year-olds lived with their parents but by 2018 this had risen to 60%. The increase for those in their late twenties was even greater, up a third from 24% to 32%. …”

https://www.theguardian.com/inequality/2019/jun/20/young-adults-have-less-to-spend-on-non-essentials-study-says?

Top two Tory PM candidates are private landlords

” … Boris Johnson, Sajid Javid (ousted from contest), and Jeremy Hunt – are moonlighting as landlords, and it shows.

We’ve now had two televised debates and housing has barely had a look in. While the outgoing Prime Minister has said she considers “solving the housing crisis is the biggest domestic policy challenge of our generation”, the candidates to replace her seem unphased by it. …

There has been no mention of social housing, nobody has outlined their plan for Generation Rent, one in three of whom will be renting from cradle to grave, and our growing population of pensioner renters has received zero mentions. Listening to them, you would be forgiven for thinking house prices and rents weren’t rising faster than wages. …

Housing inequality certainly played a part in Brexit and, as Conservative think tank Onward highlighted in 2018, by the time of the next election, there will be 253 constituencies where more than 20 per cent of voters are renters. That’s an increase from just 18 at the 2001 election. And they are not voting Tory.

Coming up with a comprehensive strategy for the housing crisis and set of policies to back it up would take time but, at the very least, it would be good to see the social catastrophe that is unaffordable housing acknowledged by the men who want to be the next Prime Minister. …”

At least three of the Tory leadership contenders are moonlighting as landlords, and it shows

Rents to be frozen for 5 years in overheated Berlin

“Berlin’s left-wing government has approved a plan to freeze rents in the German capital for the next five years.

Rents have risen sharply in the city and there have been rallies urging the authorities to keep housing affordable.

The plan is expected to become law in January. It could apply to 1.4 million properties, but not to social housing – regulated separately – or new builds.

The average monthly rent for a furnished Berlin flat is about €1,100 (£983; $1,232). …”

https://www.bbc.co.uk/news/world-europe-48677393

“Five million Britons – one in ten of the country – now own second homes worth a total of £1trillion”

The number of Britons with second homes has soared to 5.5million – with their extra properties worth £1trillion.

One in ten own holiday houses, buy-to-lets and overseas properties, according to the Resolution Foundation think-tank.

But the boom comes at the expense of young people, who struggle to get on the property ladder because of rising prices.

Just one in three own a home by the age of 29 – far fewer than the half of baby boomers who had one at the same age.

The Resolution Foundation said property wealth was becoming concentrated among older, richer Britons, with those born in the Fifties more likely to own a second home than any other age group.

It added that younger adults are left boosting the wealth of their parents’ generation by paying significant rental costs.

Spokesman George Bangham said: ‘The rise of additional property wealth is the flipside of falling home ownership. The scale of additional property wealth is an important driver of rising wealth gaps.

‘And as the huge stock of second homes, buy-to-let and overseas properties starts to be passed on to younger generations, Britain risks becoming a country where getting ahead in life depends as much on what you inherit as what you earn.’

The Resolution Foundation’s Game Of Homes report showed that the 5.5million people with additional property wealth had gone up by 53 per cent since 2001, and the value of their second homes increased from £610billion in 2001 to £941billion.

There are 1.9million owners of buy-to-let properties, 700,000 more than a decade ago, making it the most common form of second property. However, the number of people who own overseas property did not change at 970,000.

Since 2002, average house prices have soared from five times income to eight times income, but many believe this is the result of housing supply, not demand from those seeking a second home. …”

https://www.dailymail.co.uk/news/article-7143775/Five-million-Britons-second-homes-worth-total-1trillion-50-two-decades.html?ito=1490

“Help to Buy: ‘Most users did not need help report finds’ “

“Almost two-thirds of homebuyers who used the government’s Help to Buy scheme could have bought a home without it, an official report has said.
However, they may not have been able to buy the house they wanted without the help, the report from the National Audit Office (NAO) found.

It also found that one in 25 of participants had household incomes of over £100,000.

The scheme did help boost the profits of building firms, the NAO said.

It was too early to determine if the scheme had delivered value for money for the taxpayer, the report said.

“Help To Buy has increased home ownership and housing supply, particularly for first-time buyers,” Gareth Davies, head of the NAO, said.
“However, a proportion of participants could have afforded to buy a home without the government’s help.

“The scheme has also exposed the government to significant market risk if property values fall, as well as tying up a significant public financial capacity.

“The government’s greatest challenge now is to wean the property market off the scheme with as little impact as possible on its ambition of creating 300,000 homes a year by 2021,” he said.

By 2023, the government will have invested up to £29bn in the scheme, tying up cash which cannot be used elsewhere,” the NAO said.

Bigger firms made the most of the scheme.

Between 2013 and 2018 more than half the sales in England made by Redrow, Bellway, Taylor Wimpey, Barratt and Persimmon involved Help to Buy.

‘Housing bubble’

Persimmon is the biggest beneficiary, with almost 15% of the sales made under the Help to Buy Scheme.

Persimmon saw its annual profits top £1bn last year.

Mike Amey, managing director of global investment management firm Pimco, has told the BBC that profit on a house sold by Persimmon had trebled since Help to Buy was introduced, “roughly from £20,000 to £60,000”.

Fran Boait, executive director of campaigning body Positive Money, said: “It’s now beyond clear that rather than helping those who can’t afford to buy a home, Help To Buy has mainly been a subsidy for a housing bubble, benefiting property developers and existing home owners.”

The government’s investment is expected to be returned from the scheme by 2032 after it closes in 2023. However, the size of the loans mean it is very much exposed to the performance of the housing market.

From April 2021, the scheme will be restricted just to first-time buyers.”

https://www.bbc.co.uk/news/business-48610977

Government to allow Community Infrastructure Levy to fund big projects

Oooh … just in time for Cranbrook’s latest expansion plans! AND when councils all over the country are declaring a climate emergency and trying to avoid unsustainable projects. Catch 22 there for TiggerTories!

Or perhaps it will go to a new National Park – lol.

“Councils will be required to report on the agreements reached with housing developers to pay for infrastructure, under new rules laid in Parliament this week.

Housing Minister Kit Malthouse claimed that “confusing and unnecessarily over-complicated” rules were being simplified, so that communities would know exactly how much developers were paying for infrastructure in their area.

Councils will have to set out how the money will be spent “enabling residents to see every step taken to secure their area is ready for new housing”.

The Government also claimed that the changes would make it faster for councils to introduce the Community Infrastructure Levy in the first place.

Restrictions are to be eased to allow councils to fund single, larger infrastructure projects from the cash received from multiple developments, “giving greater freedom to deliver complex projects at pace”, it added.

The Minister of State said: “Communities deserve to know whether their council is fighting their corner with developers – getting more cash to local services so they can cope with the new homes built.

“The reforms not only ensure developers and councils don’t shirk their responsibilities, allowing residents to hold them to account – but also free up councillors to fund bigger and more complicated projects over the line.

“The certainty and less needless complexity will lead to quicker decisions.”

The regulations will be debated once parliamentary time allows.

The Government has also published its response to the views received in its technical consultation on developer contributions reform.”

https://www.localgovernmentlawyer.co.uk/planning/401-planning-news/40736-councils-to-be-required-to-report-on-deals-with-housing-developers