There appears to be a new divide forming within British society, a divide that has been bubbling underneath the surface for some time. The divide is a generational one between the young and the old, and Brexit has highlighted how far apart the two camps are. Three quarters of voters under 25 voted to remain in the EU, whereas three fifths of over 65s backed Brexit.
However, despite this clear and interesting generational gap, certain people are taking this to point to something more serious, namely that the elderly are winning at the expense of the young. In a recent article penned by Nick Clegg – remember him? He was one of the old guard of pre-Brexit politicians – readers are told that we should, “stop short-changing the poor young and indulging the rich old”.
This sentiment seems to have become worryingly prevalent, and the Brexit vote seems to have given fuel to the fire for those who want to blame the baby boomers for the current state of the nation, especially the divergence between the young and old in terms of their current housing situation.
Clegg goes on to state that both the young and old have been “ghettoised” with the young populating the city centres and the old the suburbs and rural areas, and he is right to point out this problem. However, he then links to the fact that the under-50s control “only 18% of all property assets” to his claim that; “The over-60s are the only age group to have become better off since the banking crash of 2007/08”. But I think he misses a key point.
It is true that the baby boomers have benefited from things like house price inflation, but this isn’t to say the rewards are only reaped by the old. From our own research at Bower Retirement, we have discovered that nearly a third of all equity release clients are using some or all of their property wealth to help their relatives get on the property ladder.
In reality, the issues that Mr Clegg lays out are problems that need to be dealt with by the government, and are not the fault of older homeowners – and I’m sure he knows this. Ultimately, thousands of older homeowners are doing far more than the government in providing the funds to help their kids get a deposit together. Before many more houses are built and the root of the problem is tackled, the selflessness of the older generation, much of which is coming through the use of lifetime mortgages, will continue to be the most effective bridge between the generations.