Across the developed world, capital is becoming concentrated in the hands of older, home-owning households. Globally, the divide between equity-rich boomers and equity-poor millennials is significant and growing.

Post-war baby boomers have lived in an era of high inflation and rising incomes. This has favoured house purchase and rapid debt repayment. Subsequent generations have experienced decreasing inflation and low interest rates. Meanwhile, high house prices have raised the hurdles 
to home ownership.

This diverging social and economic experience has significant knock-on political effects and geo-demographic consequences, so it will be setting political agendas in a wide variety of countries, both now and into the future.In the UK, the concentration of capital among older generations is playing out in the housing market as increasing numbers of people, particularly young households without capital, swell the ranks of market renting.

The simple fact that a significant demographic is capital-poor and different parts of the population have different experiences of, and expectations of, the housing market, has the potential to impact outcomes of our general election – and beyond.

This phenomenon is explored in this issue of the Focus. Lucian Cook reveals how significant stores of personal wealth are now tied up in 
UK housing. An incredible 63% (£3.6tn) of the UK’s £5.75tn housing value is held by individuals as housing equity (net of borrowing). This means that the taxation of 
land and property, housing policy 
and spending has a major impact 
on how rich a significant proportion 
of the population feels.

As Lucian points out, it is difficult to maintain consistent housing policies when £2.4tn (61%) of all owner occupied housing stock is in Conservative constituencies while almost half (48%) of the value of social housing is in parliamentary seats held by Labour. Policies designed for one area may have either no effect or adverse effects in another.

On top of this, different markets 
are at different stages of recovery 
and growth. Sophie Chick shows that while prime central London wanes, other prime markets are waxing. Market experiences will differ regionally and by sector, as our forecast page shows.

The problems of the current housing shortage, and its housing market consequences, have been decades in the making and will take far longer than a single parliamentary term to sort out. The party political consequences of getting it wrong go far beyond the malaise of a relatively small (in historic terms) number of frustrated first time buyers. Susan Emmett explores how parties have to unify 
on the basic housing issues if any real difference is to be made.

Wealth distribution, social justice, cost of care, pensions and housing benefit, the future of the construction industry, the consumer economy 
and the impact of all this on the health of the long-term economy 
are big issues. They can all increasingly be invoked as reasons to do something meaningful to put right past mistakes and to make sure the UK housing market is fit for purpose in the 21st century.

Taken from
Residential Property Focus Issue 1 2015