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Housing Market - Inheritance becoming ever more important

A cross-party think tank, Demos, says inheritance is becoming an ever more important aspect of the UK housing market.

In a new report it says that the UK has entered a ‘new age of inheritance’ with annual inheritances and inter-generational gifts in worth over £100 billion annually.

The value of inheritances (adjusted for inflation) passed on annually in the UK has doubled roughly every 20 years since 1979 and is expected to double again in England by 2040.

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A typical UK household led by people born in the 1980s is expected to inherit almost £250,000 throughout their lives; that is equivalent to how much such a household would earn, on average, in almost eight years. A typical household led by those born in the 1960s, in contrast, is expected to inherit an amount worth just four years of their average annual earnings.

But inheritances will be distributed highly unevenly: of households led by people born in the 1980s, those with the least wealthy parents (in the bottom fifth) will get a five per cent boost to their lifetime income through inheritance, but those with the wealthiest parents (in the top fifth) will get a 29 per cent boost.

Of households led by people born in the 1980s, those in the top fifth of lifetime incomes are expected to inherit £390,000 throughout their life (in 2018/19 prices), compared to just £148,000 for those in the bottom fifth.

Other disparities include white British people typically receiving over £3,000 in inheritances and gifts during 2016-18, but people in some ethnic minority groups typically receiving nothing.

A typical person in the South of England born in the 1970s is set to inherit around three-and-a-half times as much as a typical person in the North East.

In terms of home ownership, over a quarter of first-time buyers receive financial assistance from their family, helping them get on the housing ladder.

Demos has not yet set out recommendations for how public policy should change to address the issues raised in its research, but says it will do so later in its current research programme.

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    Of course this is also affected by the “ accident of birth” anomaly, my parents were feckless alcoholics, born at the right time but instead of living a normal life with the buying of property in the mix, spent it on Watneys Red Barrel Party 7 🎉 Oh well, I still did well despite them. There appears to be more of their ilk nowadays, and of course properties are far harder to source than in the 60’s.

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    Don’t buy a house in London for letting, buy 4 in the North West for same money and double your income.
    The Rents are not a quarter are they ?, I see rooms advertised up there for £400.00 pm on roads I recognise similar to some of mine in London anyway they are miles better off than us & Their licensing Application fee are not £1500. either. Suppose if one house stops paying you, you still have 3 more, unlike the one in London if they stop you have zero income.

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    Sensible.

     
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    You don't need to go as far as the north west, I can buy 4 in Norwich for your 1 in London Michael

     
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    Sounds like a tax grab coming up !

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    This was meant as a reply for Andrew:s post below

    Andrew
    People NEEDEd to work then or have a very meagre existence on basic benefits.

    Nowadays many can be better off on benefits than on minimum wage boring jobs.

    I tried to give away 2 children's beds that my grandchildren have grown out of, only used for occasional overnight stays. No charities were interested as all benefit claimants get new beds whenever they need them. I got £30 each from a nice middle class couple who have just become grandparents after advertising in Gumtree. They didn't consider themselves above using second hand beds!

    Incidentally I didn't ask Shelter if they wanted them!

     
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    Of course I'm sure you made that £60 as a donation to Shelter didn't you Robert ?

     
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    Hadn't thought of that!

    Just thought about it..........NO WAY!

     
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    In reply to Robert's post, you are exactly right, money is given to the unemployed all the time to set up home. It is the working class that seem to make the sacrifices these days.
    Also a lot of offenders get accommodated and get grants left right and centre to get new furniture, we live in a crazy but unfair world!

     
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    Simon
    A lot of people were alcoholics and still are ! Look at the number of pubs in working class areas, it was staggering ! However most people worked, there are now approx 9 million people who are neet ie, not in education employment or training.

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    People wanted to work then, they don't now

     
  • George Dawes

    I feel sorry for people in London who've paid silly money , they're in for a shock

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