Inheritance should skip a generation, says minister

Housing minister Gavin Barwell
Housing minister Gavin Barwell Credit:  PA Wire/Press Association Images

Parents should disinherit their children and instead leave their homes and wealth to their grandchildren to help young people to get on to property ladder, the housing minister has said.

Gavin Barwell urged pensioners to consider skipping a generation when it comes to inheritance as he revealed that his mother will leave her estate and £750,000 home to his sons.

Mr Barwell, who took over the housing and planning brief in the summer, said that the suggestion would help ease the housing crisis and combat  inter-generational unfairness.

Theresa May has put help for first- time buyers at the heart of her vision for Britain and warned that the housing market is “dysfunctional”.

Prime Minister Theresa May 
Prime Minister Theresa May  Credit: Joe Giddens

The Prime Minister has vowed to build more homes and a new package of measures to help people get on the property ladder is expected in the Autumn Statement next month.

Campaigners said Mr Barwell’s comments showed that “the bank of Mum and Dad is being replaced by the Bank of Nan and Grandad” because rising property values are pricing out young people from buying their first home.

Yesterday it emerged that English people aged over 55 currently hold more housing wealth in their homes than the annual GDP of Italy.

Research by Age Partnership, a retirement income adviser, found that £1.5 trillion of equity is locked up in these homes, compared to Italy’s £1.4 trillion of GDP. Mr Barwell was speaking at a Conservative Party conference fringe meeting, organised by the Institute of Economic Affairs, to discuss the housing crisis.

“The bank of Mum and Dad is being replaced by the Bank of Nan and Grandad”
“The bank of Mum and Dad is being replaced by the Bank of Nan and Grandad” Credit: John Stillwell

He revealed that his mother had recently “disinherited” him and intends to pass his family home to three of his own children and two of his nephews.

He said: “There is a job here to make very strongly the moral case to people about why these homes are needed.

“There is a profound inter-generational unfairness that has been created by this policy over a number of years. “I have got a nice home, I have got three kids and my mother has just disinherited my brother and I in order that she can pass her assets on to her five grandchildren. They will be OK.”

Asked if others should think about transferring wealth down generations like this, he said: “Yes, absolutely. Generally in life we all like to think that our children are going to be better off than us. In terms of life expectancy and new technology, they are going to be. “But at the moment as things stand they are less likely to own their own home and we need to do something about that.” 

Mr Barwell said that policy was also required to help struggling young people buy homes. He added: “I don’t want to live in a country where you have to have a wealthy grandparent to have a chance of getting on the housing ladder in this country. We need to think about their ability to get on the housing ladder. That does not mean you have to say yes to every single scheme, but it does mean we should always be thinking about this desperate need to build more homes.” 

However, Paul Green, a director of pensioners group Saga, said elderly people did not want to “lectured – it must be for those who have worked hard to own their home to decide to whom they leave it when they die”.

He added: “We know there are many generous grandparents passing their hard earned wealth to their children and grandchildren – helping them through university, getting their first car, or providing a helping hand with a house deposit. The bank of Mum and Dad is being replaced by the Bank of Nan and Grandad. 

“The only word of caution is that with people living longer – you don’t want to outlive your savings, you need to think carefully, so you can lead a full and active life in retirement and also factor in the the potential cost of care in your dotage.” 

Mr Barwell’s mother Jennifer, 75, lives in a detached, four-bedroom 1960s house in Croydon, south London, worth in excess of £700,000. She is believed to be the sole owner of the property, having been widowed in 2005. The house is three miles from Mr Barwell’s £750,000 home, built in the 1930s. Mr Barwell has three sons while his brother, Richard, is understood to have two children.

Speaking after the meeting, Mr Barwell told The Daily Telegraph: “I am a parent, she is a grandparent. People who have got homes – I am not criticising them – but we need to think about our children and our grandchildren.

“We need to think about their ability to get on the housing ladder.” Asked if he were happy about his mother’s decision to disinherit him, Mr Barwell said: “Yes. I have got a nice home, I have got three boys.” 

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