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Comment by jen20 | Hacker News Reader

London is the absolute extreme for house price, but the south west is often incredibly bad for house price to average income ratio.

Having said that there has been a definite case of “having cake and eating it too” from the boomer generation: when the retirement age was set it waa very close to life expectancy.

Now it’s 15-30 years behind, and the young are expected to fund those years of idleness from the elderly, often having enjoyed none of the state-supplied freebies the elderly got, while the elderly sit on the housing stock which should be used for young families.

This is nothing to do with luxury condos and foreign money (though those two are likely correlated in London) - it’s basic breakdown of social contract.

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In my neighborhood (just outside the M25, so desirable for younger families), at least half of the houses are occupied by old people that are rattling around in houses that are far to big for them. They are waiting as long as possible to downsize because they like the house that they have been in for 40 years, and the asset continues to appreciate. We bought such a house last year, where the old owners couldn't climb the stairs anymore and they moved to a retirement 'caravan' somewhere. Their similarly old neighbors thought that they were making a big mistake, but we suspect that they needed the cash.

Four bedroom houses in commuting towns with garages and gardens, that are better suited to families, should not be endlessly lived in by retired people. As per a sibling comment, the social contract is broken, and there seems to be little incentive for existing owners to move the stock on.

We also have some very odd taxation in the UK with regards to property.

We have Council Tax (similar to property tax), which is a monthly charge for local services. Oddly based on house value in 1991 and regressive (richer you are, the less proportionately you'll be paying).

Stamp Duty, which is a tax on buying a house. We punish people for moving out of houses that are larger than they need, to a smaller one.

So we've got generations of people who weren't particularly rich, but have ended up in very valuable houses - and there's simply no incentive for them to get out of them.

We've sprinkled on some incentives to help first time buyers, but they're massively outweighed by the lack of 'stick' applied to the other side of the market.

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