How child boomers actually DID have it simple

Stop eating avocado on toast, cancel Netflix and work harder.

That is the jokey advice typically parroted as the solution to Gen Z homeownership woes.

But stagnating wages and soaring house prices have only encouraged ‘Zoomers’ to buy more avo-on-toast and steer clear of the housing ladder completely, according to one expert.

Renowned historian Dr Eliza Filby, who specialises in generational evolution, claims economic restructuring in the wake of the 2008 financial crisis benefited Boomers, who typically already owned homes before the global crash.

Nearly two decades of rock-bottom interest rates has meant ‘wealth has paid’ while wages have been ‘suppressed’, she told MailOnline. 

As such, Dr Filby said being older is now ‘associated with wealth’, unlike in previous generations when pensioners were typically thought of as poor. 

It also means that younger generations are ‘more loyal to their parents than to their employers’ because they are more likely to acquire assets through inheritance than wages.

Dr Filby, a writer and speaker who has taught at King’s College, London and in China, said: ‘Younger generations try to build wealth and live through their wages. 

‘But those opportunities have become further and further out of their reach.

‘Although wages have gone up, particularly in recent times, they don’t buy anything like they did for our parents, like with sale of council houses to acquire those assets.’ 

Margaret Thatcher introduced Right to Buy in 1980, which gave council tenants the chance to buy their homes at least 35 per cent below market rate.

Councils were not allowed to spend proceeds on building new social homes, which significantly reduced the supply of social rented properties available in the last four and a half decades.

While David Cameron’s Government introduced Help to Buy ISAs (later replaced with similar Lifetime ISAs), which gives first-time buyers a bonus towards their deposit, the level of discount is far less generous.

Dr Filby, who at 43 is an older millennial, said the difficulties her generation has faced in terms of getting on the housing ladder ‘has encouraged us to almost buy more avocado on toast rather than get assets’.

‘Millennials and Gen Z are driven by experiences rather than assets because the assets are so far out of reach.’

MailOnline analysis suggests that a 35-year-old baby boomer in 1999 found it twice as easy to buy a house than a millennial of the same age last year.

The median house price in 1999 – when the youngest boomers were aged 35 – was £70,000, according to the Office for National Statistics. 

Average earnings for their age group was £16,700. This equates to a house price to earnings ratio – effectively a measure of affordability – of 4.2 to 1.

But average property values have shot up by four times since the late 1990s, rising to £285,000 last year. A 35-year-old millennial earning an average full-time annual salary of £32,500 had a house price to earnings ratio of 8.83 to 1.

And things appear to be getting worse for Gen Z.  

A 25-year-old Zoomer in 2022, one of the older members of the generation, earned an average of £25,200 when house prices were £275,000 – a ratio of 10.94 to 1.

A 25-year-old millennial in 2013 would have seen a slightly more favourable ratio of 9.86, and a Gen Xer of the same age in 2000 would have found it significantly easier to buy an average home with a ratio of 5.35 to 1.

Homeownership has plummeted for young people since the early 2000s, analysis of census data reveals.

More than 2.2million (52%) of 16 to 34-year-olds owned their own home in 2001. But as of the latest census in 2021, this had fallen to 1.4million (35%). 

There are now 1.8million people aged 16 to 34 in the private-rented sector or rent-free (such as those living with relatives), a rise from 1.1million in 2001.

Homeownership is a significant luxury of the older generations. In 2001, 2.15million 55 to pension age (65 for men, 60 for women) people owned their homes and 2.65m pensioners did.

While a direct comparison is not possible, due to the ONS changing how age groups were recorded between censuses, the figures show that older people own more and more houses.

The 2011 census shows more than 4.6million 50 to 64-year-olds owned their homes and 4.55million over-65s did. In 2021, this rose to more than 4.9million 50 to 64-year-olds and 5.5million over-65s owning their homes.

As a percentage of the cohort, homeownership has decreased for every age group except the over-65s. 

In 2001, 20 per cent of homeowners were pensioners, compared to 17 per cent who were between 16 and 34.

But now just nine per cent of homeowners are in the younger age group of 16 to 34, which includes millennials and Gen Z. The 2021 census shows that 36 per cent of homeowners are aged 65 or over.

Dr Filby does not see a way for more younger people to own their home ‘unless we build a lot more houses and inheritance goes down’. She said: ‘When you have a lot of home ownership in one generation mortgage-free, inheritance becomes the key way you get on the housing ladder. 

‘The very wealthy pass wealth down while alive, [whereas the] majority pass down upon death.

‘But if you’re gifted a sum from your parents for deposit, that’s a luxury of giving that while they’re still alive.

‘Most people have their wealth in an asset they live in until they die, and is subject to inheritance tax. And the average millennial is going to inherit in their 60s.’

Stalling wages and lucrative profits from assets, such as owning houses in recent decades, has led to rising inequality between the generations, according to Dr Filby.

She said: ‘When you talk about wages and assets, the story is that assets have risen, but wages haven’t risen in line.

‘Boomers were in wage economy and got themselves assets, but wages don’t pay in the way they used to.’

Meanwhile, ONS data shows that average wages have actually fallen over the last 20 years, when adjusted for inflation. The median wage across all age groups – including both part- and full-time workers – was £30,250 in 2003 but, as of last year, has fallen to £29,700.

Dr Filby said that ‘wages used to pay and now they don’t’, adding: ‘We never used to associate being old with being rich, they were often poor.

‘But now being older is associated with wealth.’

Dr Filby thinks most boomers ‘know they have had it lucky to establish a home and family’, which is why they often financially help out their children.

She says the real unfairness will be intragenerational between millennials and Gen Z themselves, based on how much they can rely on the ‘Bank of Mum and Dad’ to get on the housing ladder, pay rent, or even just cope with the rising cost of living.

‘How many millennials bought a house without the help of mum and dad,’ she asked. ‘I know one, who was only able to do it as he had a share scheme in the company he worker for that helped him build a deposit.’

This reliance on the Bank of Mum and Dad can mean younger generations ‘are more loyal to their parents than they are to their employers’, she says.

And Gen Z are even less able to rely on handouts from their parents, who are more likely to be Gen X – and less well off – than boomers. Dr Filby said: ‘When looking at Gen Z, they’re often getting support from grandma and grandad, through inheritance, university tuition or rent.’

Dr Filby said that ‘boomers normalised homeownership as a generation’, however our success relates to education. 

However, student debt has soared since tuition fees were first introduced under Tony Blair’s Labour government in 1998 for £1,000 a year, and have since been upped to £9,250 under the Conservatives.

The average student loan debt when graduates first start paying has risen from around £5,000 in the early 2000s to around £45,000 as of last year, according to figures from the Student Loan Company.

A graduate with a masters degree and paying a post-2012 student loan – on a median full-time salary of £34,963 – pays £1,512 a year in repayments: £684 for undergrad and £828 for post-grad.

Older generations have also benefited from Government directives in the past ten years or so. 

In 2010, then-Tory Chancellor George Osborne introduced the triple lock on the state pension, meaning it has risen by average earnings, inflation or 2.5 per cent, whatever is highest.

And if the Tories win the General Election they plan to bring in the ‘triple lock plus’ to guarantee pensioners’ personal allowances will always be higher than the level of the new state pension. 

A Financial Conduct Authority report earlier this year showed just one in 10 over-75s feel they are ‘not coping’ financially.

This was compared to the 35 per cent of 19 to 34-year-olds and 39 per cent of 35 to 44-year-olds who said the same.

• Dr Eliza Filby’s upcoming book, Inheritocracy: It’s Time to Talk about the Bank of Mum and Dad, is out in September and published by Biteback.