The best way for young people to get their own home? Have property-owning parents.
Youngsters with parents who have property wealth are nearly three times more likely to be home owners by 30, according to The Resolution Foundation.
Its report found that parental wealth is almost as crucial as how much people earn when it comes to getting a home.
“Buying a home is almost impossible for many young people without access to the bank of mum and dad,” it said.
In the mid-1990s and early 2000s, homeownership rates for 30-year-olds with parental property wealth were only twice that of young people whose parents did not own a home.
The gap has grown so that recent homeownership rates for 30-year-olds with parental property wealth are almost three times that of those without parental property wealth.
Young people with high levels of parental wealth benefit in other ways too – they are 74% more likely to have a degree than those without parental wealth, and typically earn at least £500 more per month.
Both of these factors increase their chances of home ownership, the Foundation, a think tank that focuses on people on lower incomes. pointed out.
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The think tank added that having a society where young people’s housing aspirations are so dependent on what their parents own is undesirable, and emphasises the need for politicians that say they want a socially mobile country to focus on wealth, not just income.
While building more homes will help, the report warned that policymakers will need to be more radical if they want to see real change, with high house prices also being driven by long term declines in interest rates.
Stephen Clarke, senior economic analyst at the Resolution Foundation, said: “Our housing crisis is so big that what your parents own is becoming as important as how much you earn when it comes to owning your own home.
“This is particularly worrying for the one in two millennials who aren’t homeowners, and whose parents also aren’t either.”
Mortgage broker Mark Harris, chief executive of SPF Private Clients, backed up the research.
“The majority of first-time buyers who come to us to get a mortgage have significant financial assistance from the bank of mum and dad,” he said.
“It’s the only way most youngsters can afford soaring property prices, both in terms of help with the deposit and also with the mortgage payments.”
Source: Simon Read