Young people three times more likely to buy if parents are homeowners
If your parents have property wealth, you are now almost three times as likely to be homeowners by the age of 30 than those whose parents are not homeowners.
That’s the key finding of a new report published by the Resolution Foundation.
In fact, parental property wealth is now crucially important in determining young people’s housing prospects.
Homeownership rates for 30 year olds with parental property wealth are 25% – almost three times that of those without. This has risen from 20 years ago when having homeowning parents meant you were twice as likely to buy your own home.
As well as greater homeownership rates, young people with high levels of parental wealth are 74% more likely to have a degree than those without parental wealth, and typically earn over £500 more per month, both of which increase your chances of homeownership.
But even after accounting for these education and pay benefits, access to the Bank of Mum and Dad is independently driving up young people’s homeownership.
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.
“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.”