Homeownership among young Brits plunging amid house price surge


The IFS said that for 90 percent of 25-34 year-olds, average house prices were more than four times their after-tax income, while this was true for under half of 25-34 year-olds in the mid 1990s.

In 2015/16, 8% of young adults on low incomes were home-owners compared with 64% of those with high incomes.

It means that the home ownership rate of middle income young adults is now closer to those with low incomes than those with high incomes.

Homeownership rates for middle income young adults may stabilise over the next few years, however, since house price growth has began to slow in most parts of Britain, Hood said.

Comparing a young adult today with a young adult 20 years ago whose income was similar relative to house prices, they are equally likely to own a home, the research found.

The chance of owning a home for young adults in the United Kingdom has more than halved in the last 20 years, according to the Institute of Financial Studies (IFS).

The IFS said young adults from wealthy backgrounds are now significantly more likely than others to own their own home.

As a outcome those born in the late 1980s are much less likely to be homeowners in their late 20s than their immediate predecessors.

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While homeownership among middle-income young adults has declined across Britain, it fell most sharply in the southeast, the figures showed.

For almost 90% of 25 to 34-year-olds, average house prices in their region are more than four times their annual after-tax family income - and for almost 40 per cent house prices are more than 10 times their income.

Wage growth failing to keep pace with house prices is being blamed for a "collapse" in home-ownership levels among young adults.

But Labour's Shadow Housing Secretary John Healey blasted the Government's response. Between 2014 and 2017, 43% of 25- to 34-year-olds whose parents were in higher-skilled jobs owned their own home, compared to 30% of those whose parents worked in lower-skilled jobs.

Over the past two decades average house prices have grown around seven times faster than the average incomes of young adults.

Housing minister Dominic Raab MP also told media: 'Through schemes like Help to Buy, we're helping more people on to the housing ladder and past year saw the highest number of first-time buyers in the United Kingdom since 2006.

There have been some positive signals for young buyers in recent weeks, as fresh figures showed the number of first-time buyers increased to the highest levels since 2006, helped by slowing house price growth since the European Union referendum.