How many of those baby boomers have used housing as a store of wealth that they plan to use when they retire? For years we have been told that a house is an investment [and this is where I have always disagreed with my own generation including some good friends] and that house prices will always rise. They need that rise more than ever now the baby boomers are approaching retirement and looking to sell and trade down, releasing that wealth. To understand why just look at what happens with some simple maths. A baby boomer with a house valued at £400,000 is looking to trade down to something around say £200,000, giving them a nest egg of £200,000. Lets say prices fall by 20% - they now have a house valued at £320,000 and their target house is now worth £160,000, giving them a nest egg of only £160,000, a loss of £40,000 in the baby boomers eyes.
Much better that prices rise by 20%, giving them a nest egg of £240,000. But who pays? Younger generations who now need to work harder and longer to afford the bigger house, a transfer of wealth to the baby boomers. And as such a huge demographic baby boomers will scare politicians to death because they are more likely to vote and so we will see more efforts to keep house prices high through regulation, with planning permission being determined by locals aka NIMBYs as a current proposal. Baby boomers will also be in a position to demand higher benefits - free bus travel, higher pensions, fuel allownces, free BBC and a myriad other methods of transferring wealth (stealing?).
So what is this marvelous idea that might provide a check on those rapacious baby boomers($):
SIR – You talked about the significance of the elderly voting-age population in Japan as a factor in determining government transfers, such as pensions and health care (special report on Japan, November 20th). The median age of voters in Japan will reach 65 within the next 15 years. We should seriously consider giving children a vote and having their parents use it on their behalf. Parents with children under 18 would then control 37% of the vote.Why should we give children a right to vote? Because intergenerational income distribution became a contentious public-policy issue with the establishment of public-pension systems. It may seem outrageous to extend the vote to children, but the extension of the franchise to women was also opposed. That historic change was achieved through the
democratic process and resulted in a dilution of the voting power of the male-only electorate. Greying populations require such a fundamental democratic change.
Director Centre for Intergenerational Studies
Brilliant. OK, so there are a few down sides, but no more than when those children get to 18 anyway.
And if those new found voters have any sense they wil push for a Land Value Tax to force the baby boomers to allow house prices to become affordable or at least pay for their NIMBYism.
For more on Land Value Taxes follow Mark Wadsworth, a tireless campaigner for them if ever there was one.