Yolande Barnes, director of world research at Savills Across the developed world, capital is concentrated in the hands of older, homeowning households. Globally, the generational divide between equity-rich “boomers” and equity-poor “millennials” is significant and growing. Postwar baby boomers have lived in an era of high inflation and rising incomes. This has favoured house purchase and rapid debt repayment. Subsequent generations have experienced decreasing inflation and low interest rates, while high house prices have raised the hurdles to home ownership, especially in the post-Lehman world of low loan-to-value ratios and slow debt repayment. The consequences for the under 40s are far-reaching and structural, with no-choice renting rising fast. In the UK, we forecast the open-market rented sector will grow from 7 per cent of homes in 1989 to 24 per cent by 2019 — a huge shift with profound implications for households, investors and politicians. We need new ways to help disenfranchised generations accumulate equity and access home ownership, while also making renting a stable, acceptable and desirable form of tenure. Doing this will present investor opportunities but may take more open minds, and borders, to fund. Doing nothing risks further disaffection and alienation among younger people with all the consequences that entails.
Posted on: Sun, 11 Jan 2015 22:16:43 +0000
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