A strange title for this article I know! Firstly, let me explain for those who don’t know the definitions used in this post…
Boomer – a person born in the years following the Second World War, when there was a temporary marked increase in the birth rate often defined as those individuals born between 1946 and 1964.
Millennial – a person born between the early 1980’s and the mid-1990’s to early 2000’s. Researchers tend to use the period 1981 to 1996 as a widely accepted definition.
It seems to me that Millennials are blaming Baby Boomers for their inability to afford to buy a property. So, have the Baby Boomers messed things up for the Millennials in terms of getting on the Derby property ladder? They bought their own council houses in the 80’s and 90’s, meaning there are no affordable homes for today’s youngsters, thus driving up the demand for rental homes and the price of homes and making them unaffordable.
I decided to look at the figures, which do not make for good reading…
In 1980, the average Derby household income was just under £6,000 per annum and the average Derby house price was £17,133; whilst today, the average Derby household income is £28,455 per annum, yet the average household value is £217,800, meaning…
the average value of a Derby home was 2.86 times more than the average household income in 1980 compared to today, where it is 7.65 times a Derby household income
… it’s no wonder then that Millennials are pointing the finger at Baby Boomers!
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 getter’ 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. (The phrase ‘OK Boomer’ become fashionable as it started as a way of showing Baby Boomers that things were “easier in the past”, yet now it has become just a way for younger people to discredit the views of older people).
Back to the figures… the political parties seemed to forget the numbers in social housing have 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 as the politicians state 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 about earnings?
What some people seem to forget is whilst Derby property values were lower, so were salaries.
The true cost of affordability is the mortgage payments. 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 Derby the mortgage accounts for 35.4% of the household income compared to 48.9% in 1980.
Things were much tougher for homeowners in 1980….
The issue here is something much deeper. Baby Boomers say it is the Millennials’ own fault they can’t afford to buy their own home because they spend all their money on three holidays, avocado on toast, going out down the pub 3 times a week and buying the latest iPhone or suchlike whilst Millennials accuse the Baby Boomer generation for ruining the housing market ‘per se’ by being selfish!
Both are right and both are wrong.
Super Parents and Grandparents…
In our experience many Derby Baby Boomers are trying their best to help out their now grown up children and, in some cases, grandchildren with a deposit. They are fully aware of current Derby house prices compared to when they bought their own homes.
I am not a fan of attaching labels, be it Millennials, Baby Boomer or whatever. It’s really a point of attitude and behaviour and circumstance rather than the date of your birth. Every generation has had its fair share of feast and famine and whilst I appreciate the irony of the title of this article, let’s stop labelling people and making assumptions, everyone needs to understand each generation’s issues and be more understanding!
Derby OAP’s are actually stuck!
Lets take a quick look at Derby’s older generation…
Of the 25,389 households in Derby where the head of the household is 65 years or older, an astounding 18,936 (or 74.6%) of those are owned, almost equal to the national average of 74.1%, which sounds great – yet nothing could be further from the truth.
I chat with many Derby pensioners who would like to move but cannot, as there is a scarcity of such properties for Derby mature people to downsize into. So, when the Millennials are blaming the Boomers for the lack of affordable properties around… just bear in mind that the situation is often out of their hands.
We will be doing a follow up article on how Derby’s older generation fit into the Derby housing market in more detail soon!