Young people whose parents own their own property are far more likely to be homeowners themselves, figures from the Resolution Foundation think tank reveal.
The think tank has published figures that demonstrate that parental property wealth is now a key indicator as to whether a young person will be able to get on the property ladder.
In the mid 1990s and early years of the millennium, twice as many 30-year-olds with property-owning parents had their own property compared with 30-year-olds whose parents did not own property.
That discrepancy has now risen to three times more likely. One in four (25%) 30-year-olds with property-owning parents own property, while less than one in 10 without property-owning parents do.
The graph below demonstrates the differences.
Home ownership among 30-year-olds with property-owning parents has fallen from 40% to 25%.
For those without property-owning parents, it has fallen from 20% to 9%.
The Resolution Foundation says that even accounting for education level and pay packets, homeowning parents are a defining factor in whether a young person owns their own home.
Stephen Clarke, senior economic analyst at the Resolution Foundation, says: “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.
“In fact, 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.
“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.”
- This article was originally written by our sister publication Moneywise.