Boomerang generation and the housing market, and it could affect the boomer generation too.

Becoming a property owner for the first time in your late 30’s is now the norm. A survey by the English Housing Association found that 1 in 3 first time buyers are now over 35. Ten years ago 90% of first time buyers were under 35. Its made worse by having to save up thousand of pounds for a deposit in bank accounts that earn virtually no interest and don’t keep pace with inflation. Then I thought, at what age will our children pay off their 30 year mortgages – when they are 65 or 70? Its all very depressing.

Those of us who have boomerang-ing children should be worried on several fronts – for their children and for themselves. It is not easy for a 20 something to move back home after a long period of independence, but maybe that is the only option if they want to save enough for a deposit. Its not easy for the parents either. I speak as a parent whose youngest has now got a job, and a year later has just moved into her first rented flat with friends. I’m thrilled for her to have her independence, although I miss her, but it grieves me to think how much money she has to pay out in rent and council tax. Five years of living at home would provide a juicy fat deposit, but I suspect that, much though we love each other, we would all be at each other throats by then, and actually I am quite enjoying my own independence for the first time!

Then what happens if we oldies are trying to downsize, but the next generation down hasn’t been able to move up a notch to free up those houses that we would have moved down to? You may say that the simplistic solution would be that we should just do house swaps with our offspring, but this isn’t going to work for those of us who need to downsize to release capital to supplement our depleted pensions.

This housing crisis is going to impact all round. Boomers and boomerang-ers beware!