Fifty years of rising house prices

I've been thinking along the same lines, unfortunately I am not aware of any data on this as the baby boomers are a slightly unique grouping. The figures from the black death are of no use either.

The only assumption that I can make is that when they pass their children will try and rent them and when that market is saturated will try and sell them on the housing market.

Other questions are how old are the baby boomers and what is their life expectancy? If you factor in this as a bell curve of longevity then I'd guess the major affect will be felt when 2/3rds of baby boomers are no longer with us.

That can probably be factored into the normal immigration figures, especially if the government actually does cut immigration by 75%, though I doubt it will as it doea not appear to have happened in my lifetime, possibly because industrialists want cheap labour.

Plus some Europeans have moved here. I do wonder if I would be better off moving to Munich or Switzerland.

However, both wages and the cost of living have increased dramatically over the same period.

Together with the revaluation of the pound on a few occasions, which has not been factored in.

As for the baby boomers, they have children who cannot afford houses, so I would think any assets would be passed on to the children so they could buy houses, or just pass the house on to the kids.

I would imagine house prices, factoring in ALL things, have not risen by as much as Halifax suggests.

Interesting article Cliff, although you seem to have gotten confused in a couple of areas:

"As you can see, during the boom years of the Eighties, house prices

rose by an average of 4.9% a year above inflation. However, boom

followed bust, with real prices falling by 2.4% a year throughout the

Nineties."

Your table indicates that real prices *rose* by 2.4% a year throughout the nineties - hardly a major bust!

"This report also dispels a common myth: that house prices always go up.

In fact, over the past 50 years, real house prices (after deducting

retail price inflation) fell in 15 years, which is 30% of the time."

That's a *very* weasely sentence (http://en.wikipedia.org/wiki/Weasel_word)! The 'common myth' is not that real house prices always go up, rather the belief, backed by the evidence, is that nominal house prices have a strong upward tendency and, over time, will continually end up reaching new highs. The report actually supports this argument - in the 1990s, which was the time of the last property 'crash' prices actually rose by 22% in real terms i.e. after inflation.

illus 12000, that's a good question, but not one that's likely to trouble the UK for some time. The 'baby boomer' generation was born between 1945 and 1957, so they are now between 64 and 52 - hardly on the verge of dying en masse! You can see them on the UK population charts:

http://www.statistics.gov.uk/populationestimates/svg_pyramid/default.htm

That big bulge just above 60 is the main part of the UK baby boom - people born in 1946 and 1947. Of course, the UK also had a second larger baby boom in the 1960s, which is the larger bulge around 40. So even as the 'baby boomer' generation begins to die out, the 1960s boom will be going strong and will likely snap up, or just straightforward inherit, any property that comes back on the market.

Of course this is all fairly academic. With the UK population expected to increase to over 70 million in the next few decades, and with levels of housing construction way below the levels of household formation, there will continue to be sustained upward pressure on housing prices. This was the conclusion of the Barker Report, which stated that the UK will need to build 160,000 new houses per year to keep the level of real house price increases at 2.4%, which would be around a 6% nominal annual increase, and 260,000 new houses to keep the level of real increases at 1.1%, which would be below wage price inflation, hence making houses more affordable again. As Cliff points out, less than 157,000 new houses were built in 2009, so above inflation increases are likely to be the norm for the next couple of decades.

I find the salary increases hard to believe. My experience is that in the early 60s, a working class, married man could start a family in his early 20s, save for a deposit and buy a 3-up, 2-down house by the time he was 25 and his wife dedicated most if not all of her time to home/family. In short, one working class salary could afford the mortgage on the typical family home.

This is a pipe-dream today. A professional (middle class couple) with both partners working would struggle to save enough to start a mortgage and a family before their late 20s and then neither could afford to give up much time for the family very long. It's not just the house; the extra car, child care, consumer electronics (to make life easier, more bearable) all add to family expense. This is the treadmill that the modern family is locked into, precious little quality time for itself and even less for community. Anybody looking for reasons for social decline - look no further. 40 years to break, probably take at least 20 years to fix assuming any of our 'leaders' recognise the problem or care to fix it (most being rich enough to be above the pain threshold).

"The shared house, assuming it gets planning permission, will then be placed in a different planning classification from normal residential houses, and it may well be very difficult to change the designation back again"

That's quite an assumption and almost certainly an incorrent one, given that the only raison d'etre for these powere is to limit the growth of shared housing and "studentification" or residential areas. It will not of course improve the supplyy of faily homes, but rather accelerate their being converted into flats.

As far as the house prices debate goes the only question is whether theinflation was "real" ie derived from a genuine inequality of demand and supply as opposed to speculative, ie self-fuelling in he expectation of future rises.  I suspect it's a ixture but more of the latter than Cliff thinks. The rate of household formation has been accompanied by an increas in demand for space--separate bedrooms for kids, ensuite bathrooms, home offices--that would have been unthinkable 20 years ago. Cliff also alludes to, but draws no conclusions from, the incease in creature comforts and general upgrading of the housing stock.  Our Victorian and Georgian housing stock in particular has been significantly upgraded over the period Cliff is writing about.

Should also point out that correlating average salary to house prices over 50 years is a bit tenuous. You'd get better results comparing house prices to household incomes - that'd account for the fact that 50 years ago only 1 person tended to work whereas now it's more usually 2. More (combined) income will have driven up prices to an extent all by itself.

UpHillAllThe Way.

Your dad thought 'women would regret getting equality...'

The no of women I know who would just love to have a man to look after them and stay home to have kids would surprise you. These include women who are highly professional, competent and succecssful in their career.

Alas. The men are too scared to chase after the women these days.

And the result of equality ? Single person homes and lone parents.

As they say, nothing is free in life. Be careful what you wish for.

I dont think your dad missed the mark.

With regard to the idea that women working and not staying at home is a modern one is wrong.  Apart from in Upper and Middle Class Victorian society, women have always had to work to contribute to the household in order for families to survive.  Historically Working Class women didn't go OUT to work but helped on the farms, did sewing and weaving at home, ran lodgings and taverns from their homes and all manner of other tasks alongside bringing up the children and keeping the family fed and cared for.  

In many ways, the Victorian Middle Class tried to rewrite the history books to fit in with their schemes by saying that women didn't work, but the average family couldn't afford to only have the man working so the whole household contributed.  This was particularly the case with the rural population, who were in the majority in Pre-Victorian Britain.

All we've done is to come full circle as a society with the whole family having to contribute to the household to supply that family with anything more than the basics.