THE PROPERTY EXPERT

THE over 55s in England own more housing wealth than the entire annual GDP of Italy, according to research by Age Partnership.

With this in mind, housing minister Gavin Barwell suggested pensioners should ‘disinherit’ their children and instead pass homes and wealth to their grandchildren.

This comment has obviously caused a bit of a stir, as it is not without its issues, but discussion on the subject is certainly worthwhile.

First, pensioners do commonly seem to face pressure to make financial decisions from a number of quarters, and in some cases it can seem quite unfair. We have all heard of the fall-outs caused by inheritance arrangements and seen pensioners, whether family or friends, encouraged to make decisions that are perhaps better for others than for themselves.

The fact is, as people reach pensionable age, it is more difficult to make financial changes, for example working more hours, trying for a promotion or career change, or other options that remain available for those who are younger. For this reason alone, caution and restraint are sensible.

There also exists a massive range of inequality amongst over 55s, so while some have millions of pounds tied up in property, there are those who still have mortgage repayments to consider, and also those who have very little money outside of their home, for whom the property will need to be security in the event of residential care being required.

The main problem, outside of the pressure that this statement puts on pensioners, is that the statement is unrealistically broad and does nothing to solve the property issues of the UK.

Instead of focusing on what individual grandparents and pensioners should be doing with their wealth, perhaps some attention should be placed on simply building more homes.

The financial arrangements of Mr Barwell and his family, who appear to be in relative fiscal comfort, really do not scale to an appropriate remedy to the housing problem of the UK.

That said, if it is possible to help family, whether from the Bank of Mum and Dad or the newly coined Bank of Nan and Grandad, first-time buyers need all the help they can get – as prices continue to rise, it looks like property will continue to be a good investment.