Why I try hard not to hate the baby boomers...

On the subject of housing I got a reply from Grant Schapps (shadow hosuing for the Tories). This is a bit long winded but if you're interested read on... I wrote as follows: I am writing to you (as Shadow Housing Minister) since I am a council tenant of a London Borough and I am concerned about my future ability to buy my home. I have just spent some time carefully reading your party’s recently published papers on housing. I was pleased to note that the Conservative party, who will almost certainly be in government by next year have expressed an intention to extend right to buy. The policies outlined such as the qualifying time for a discount moving with tenants, schemes to improve mobility and rewarding tenants with an equity stake are all very welcome. However, I saw no explicit policy in respect of the current nominal caps on the right-to-buy (RTB) discount. I would expect and hope this is something that will be swiftly amended under a Conservative government. If the right-to-buy is to be extended, it will only enable me to buy my home if the cap on the discount is removed. The £16,000 cap imposed by John Prescott in 2003 was opposed by the Tories and David Davis, the shadow deputy prime minister at the time pointed out that Mr Prescott was destroying a popular policy and depriving those on low incomes of the chance to get on to the property ladder. This cap on the discount has been in force when property prices have risen dramatically. At the peak of the market, this discount translated to less than 8% of the value of my home and became insignificant given the acute dissonance between the nominal value of the remaining 92% and my modest but hard-earned salary. Like countless other people, I see little point in shared ownership which has significant drawbacks and I wish to either own outright or remain as a tenant. There was nothing wrong with the original formula of 50% discount after 20 years tenancy and 35% discount after 5 years. If the government was able to restore or even extend these discounts, more tenants can become responsible homeowners. By expressing the maximum discount simply as a percentage, it will enable council tenants to exercise their RTB with a discount proportionate to fluctuations in the housing market. Under the Labour government, home ownership became a pipe-dream for too many people. If I were awarded a 10% equity stake which could count as my deposit and I received a 35% discount on the total property value, there is a real possibility I could afford to buy, especially if the overheated market continues to cool. I realise that there is opposition to RTB from the left, but for those like me on average incomes, it is the greatest opportunity for social mobility coupled with the greater personal autonomy that home ownership affords. Many thanks for your kind attention. Their Reply: Many thanks for your email to Grant Shapps MP regarding your experiences and your views on the Right to Buy for social housing tenants. Grant has asked me to thank you for your email and asked me to respond on his behalf. Your experience is an all too common one. There are tenants all over the country who might, with the right level of support, be able to move from social housing to home ownership. It was with this in mind that Grant announced proposals that would allow tenants with a proven track record of good behaviour to apply for a 10% equity stake in their home. This would provide tenants with a financial stake in their community and could yield a cash sum when the tenant exits the social sector. The Green Paper that Grant launched last month, Strong Foundations, also contained a pledge to secure the Right to Buy for tenants moving within the social sector. Specifically on the subject of RTB discounts, Grant shares your concerns about the level of discounts. In recent weeks he has asked a number of questions on the subject in Parliament. When the discounts for RTB sales were reduced in 41 areas, as part of the Housing (Right to Buy) (Limits on Discount) (Amendment) Order 2003, the Government promised to keep discount levels ‘under constant review’, but have done no such thing despite large fluctuations of both average house prices and the rate of inflation generally. When Grant asked about this very subject he was told by the Minister that ‘the Government have no plan to review the maximum limits on Right to Buy discounts’. See http://www.publications.parliament.uk/pa/cm200809/cmhansrd/cm090427/text... A lot has changed since the Government altered the maximum discounts – house prices are 39 per cent higher and £16,000 in 2003 is now worth less than £14,000. The Government’s position on this matter betrays its inherent contempt for the Right to Buy scheme which is based predominantly on political expediency rather than the best outcomes for tenants. Labour appears to want to keep people in social housing even when a tenant like yourself tries hard to achieve home ownership. Conservatives are committed to offering as many social housing tenants as possible an opportunity to get on the housing ladder. It’s worth noting that the Government’s flagship scheme on this front, Social Homebuy, has limited support from local authorities (just seven are signed up) and fewer than 100 properties were sold under the scheme last year. I can assure you that this is an issue that Grant will continue to raise with Ministers. He is a passionate believer in extending the opportunity of home ownership to all those wishing to get a foot on the housing ladder. Thanks again for getting in touch. Please don’t hesitate to contact Grant again in the future if there is anything else you would like to discuss. Best regards...

The reason I think the tories are serious about RTB is not for the reasons they give but that it is money in the coffers at a time when they will seriously need it. They can't get any money from selling council stock if tenants can't afford to buy outright (and refuse to buy a stake)(it also reduces housing maintenance costs at local level). My new home may have been valued at 300k at the peak. I think prices in London will fall 40% from peak so that's a value in a couple of years time of 180k. 35% RTB discount from that is 117k which I can easily afford. A house costs around 80k to build so they can build (or subsidise) a replacement and have money left over. The question is, will they replace the stock they sell off? Failing to do this in the past is the cause of some current problems (not RTB per se). jude

My parents still have two adult children living with them (and one at university) and since unemployment will hit the 18-30 age group hardest (and these are the people most likely to be in negative equity and saddled with unaffordable mortgages) , this will become more common. What we'll see more of, as you say is children with children moving in with parents and there being three generations under one roof(I also agree it may have positive points despite being hard). For me personally, I have learned to get along with my parents but not to the extent I could live with them and for whatever reason, there are people like me for whom returning to the safety net of mum and dad isn't an option. As stormy says I really should be grateful that I have an affordable home and today I am. As you say, I don't think most people really appreciate how bad things actually are. Talk of 'green shoots' about this 'dead cat bounce' in both houses and shares is astonishing when the fundamentals indicate we're not even half way through, but people believe what they want to believe and my generation in particular is financially illiterate. Still, there's always one last sucker rally to trap the last few bulls! Back to the subject of the baby boomers, I also post regularly on an ecomomics forum and one of my colleagues over there pointed out that the debt bubble, fiat money, housing crisis and all the other components of a shameful legacy are not due to the boomers being any more selfish than my generation but simple by virtue of demographics - there are so many of them (that's why they're called baby boomers) that's why these problems (which are actually endemic in the system) went critical with this generation. jude

Hey Denver. I feel so much better after the rant...resentment is almost purged and replaced with a warm feeling of contentment! I am a Beatles fan and a Rolling Stones fan. I also like the Kinks (although that might be a Brit thing). I think a lot of the hippie sub-culture went mainstream. My parents weren't hippies but we accused them of it when my uncle showed me a photo of my father in a kaftan! I think we tend to have a very idealistic notion of the past (especially if we weren't there) and my fanciful imaginings of London in the swinging sixties are probably a little rose tinted. And though my parents could afford a nice house in Surrey (thats a county in Southern England deemed to be quite posh) as others on this thread have pointed out, they couldnt afford much else (hand-me-down clothes, no holidays etc.). London in the nineties was quite cool as well as being affordable. We (eight students) were renting a three storey town house in Kilburn (North London) . My room was so massive (my share of the rent was about £45 a week) it has probably been converted into a studio flat now. I've gone off Oasis a bit but I still have happy memories. Another generation X neologism: Now Denial: To tell oneself that the only time worth living in is the past and that the only time that may ever be interesting again is the future. jude