Young people’s home ownership prospects ‘linked to parents’ property wealth’
Young people whose parents have property wealth are now nearly three times as likely to be home-owners by the age of 30 compared with those whose parents have no property wealth, according to a think-tank.
Parental property wealth and the “Bank of Mum and Dad” is increasingly a key factor in determining young people’s prospects of getting on to the housing ladder by 30 years old, a report from the Resolution Foundation suggests.
It said that between the 1990s and early 2000s, home-ownership rates for 30-year-olds with parental property wealth were twice those of young people whose parent did not own a home.
Between 1991 and 2003, two in five (40%) of 30-year-olds with parental property wealth were home-owners themselves compared with around one in five (19%) of those whose parents did not have property wealth.
In more recent years, young adults have seen their prospects of being on the property ladder at 30 diminishing more quickly if their parents are not home-owners themselves, the report found.
The recent home-ownership rate for 30-year-olds with parental property wealth is nearly three times that of those without parental property wealth.
Between 2004 and 2017, one in four (25%) 30-year olds with parental property wealth were home-owners themselves, compared with less than one in 10 (9%) of those without parental property wealth.
The report also noted that higher levels of parental wealth generally can boost children’s chances of going on to university and getting a higher-paid job – both factors which can increase someone’s chances of home-ownership.
The Resolution Foundation works to improve the living standards of people on low to middle incomes and its report used a range of sources.
Stephen Clarke, senior economic analyst at the Resolution Foundation, said: “High house prices and sluggish wage growth have meant that being able to buy a home of their own is almost impossible for many young people without access to the Bank of Mum and Dad.”
He continued: “These findings reinforce the need to think more broadly about what the barriers to social mobility are in 21st century Britain.
“We’ve always known that who your parents are affects what education you get and job you do.
“But increasingly the effect is continuing later into life by determining whether you are able to own a home of your own.”