A letter writer has challenged the notion that homeowners have not benefited from huge increases in property values, arguing that those who bought homes in the postwar era are sitting on 'unearned wealth' and should be willing to help younger generations.
Inflation-adjusted gains dwarf costs
Michael Pyke, writing in response to a previous letter, asserts that a house bought in 1965 for £3,500 would now be worth around £87,500 if its value had simply kept pace with inflation, rather than its current market value of £350,000. Similarly, a house that cost £20,000 in 1975 would be worth around £220,000 with inflation, instead of £900,000.
Pyke questions what 'associated costs' could come anywhere near such huge increases in value. He dismisses the idea that young people could buy a home if they avoided luxuries like 'fancy holidays' or expensive cars, noting that cars costing £90,000 made up at most 0.75% of new registrations last year, and calling such thinking reminiscent of Charles Dickens' novels.
Call for intergenerational support
Pyke agrees with columnist Polly Toynbee, who argued that the system is rigged against young people. He says those who grew up in the early postwar years and now own valuable properties should acknowledge their good fortune and be willing to help out less fortunate generations.
The letter highlights the stark disparity between house price growth and inflation, and the difficulty younger people face in entering the housing market.
