The infuriating boomer habit that’s making it even harder to buy a home

As Gen Z and Millennials know all too well, getting on the housing ladder can often feel like an impossible task – so much so that we’ve been dubbed ‘Generation Rent.’

A new study shows that the older generations – specifically baby boomers – are overwhelmingly buying property using cash from a previous residence. Known as ‘cash buying,’ this tactic replaces the need to take out a mortgage on a new home.

But for the younger generations trying to get a foot in the property door, the exact opposite is true.

As David Fell, lead analyst at Hamptons, tells Metro, baby boomers are more likely to be homeowners than any subsequent generation.

‘The generation growing up in the shadow of the Second World War was the first to buy in big numbers, making owning rather than renting a home the norm for the first time,’ David explains.

‘While mortgage payments were initially punishingly high, rapid house price growth coupled with years of double-digit inflation meant their mortgage payments quickly fell relative to both the value of their home and their salary.

And when it comes to buying a home, higher mortgage rates are still ‘pushing the pendulum’ in favour of older mortgage-free owners.

‘The benefit of buying in cash is larger today than when mortgage rates dropped below 1%, meaning older homeowners who cleared their mortgage 10-20 years ago have unprecedented buying power relative to younger generations who are often still grappling with mortgage payments deep into middle age,’ David adds.

In 2023, 70% of properties in central London were bought with cash, according to Savills. The figures covered ‘prime central London,’ an area that includes the likes of Chelsea, Camden, Notting Hill and Westminster.

And at the same time, the average 21-year-old will have paid their landlord £80,000 by their 30^th birthday.

However, the same story is playing out in the US, too.

According to a new report by the National Association of Realtors, over the last year, younger buyers in the US have largely depended on savings to get on the housing ladder, while older buyers still tend to use proceeds from the sale of their previous residence to fund the cost.

Baby boomers also make up the greatest percentage of sellers (53%), and along with the silent generation, are more likely to sell up on account of their homes being too large.

At the same time, the controversial ‘Bank of Mum and Dad’ funding option remains largely necessary, as 33% of younger Millennials received money for a deposit in the form of a gift or loan from either a friend or relative.

Posting over on the r/HousingUK Subreddit, @Diligent-Bridge2178 shared their experience of being trumped by a cash buyer on their ‘dream home.’

‘We put in a very competitive offer…turned out they received eight offers in total,’ they penned, adding that at the time, they were searching for properties in London’s Zone 4 around the £700,000 price point.

‘One of them was a cash buyer. And of course, they got the house. We then made a counter offer…and still didn’t get the house as it’s hard to beat a cash buyer.’

Elsewhere, @bransby26 shared that when they were trying to sell their house a few years ago, ‘boomers tried to sabotage [their] house sale’ by offering up cash.

‘Several prospective buyers toured the home. The first was a boomer who was friends with our next-door neighbours (also boomers). She made a cash offer on our house that was right at our asking price, but we would have to move out right away,’ they wrote.

‘We had other visits lined up, so we waited to see what came of those. The couple that ultimately ended up buying our house was touring the house, and our neighbour started talking to them.

‘She told the couple that they shouldn’t waste their time looking at our house because her friend had already made a cash offer and that we would probably take it.’

In the end, they didn’t accept the cash offer – as they chose to go with a couple that offered ‘significantly’ over the asking price. By way of response, the cash buyer was ‘stunned.’

And for @Glum-Caregiver-7963, who is an ‘older Millennial,’ they wondered how the ‘next generation is supposed to own a house.’

‘I will admit we had help buying our property, and we wanted to stay in London,’ they wrote.

‘I feel sad for the next generation if things don’t change. I have nieces and nephews who are in houseshares and the price they pay is ridiculous. One of them has to ask for help from their parents due to [the] majority of their salary going towards rent.

‘Sick of seeing people say how if you don’t pay for Netflix subscriptions and don’t eat out, you’ll save money.’

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