Young middle-earners fall down the property ladder


The research found that over the twenty year period, the share of this demographic who own their own home has shifted closer to the percentage for the lower income group (8%), than that recorded for the higher income group (64%).

However, 20 years ago, less than half of young adults faced house prices of more than four times their income, and less than 10% faced house prices of more than 10 times their income. In 2014-17, 30% of 25- to 34-year-olds whose parents were in a low occupational class (e.g. delivery drivers or sales assistants) owned their home, compared with 43% of those whose parents were in a high occupational class (e.g. lawyers, teachers or estate agents).

The odds of a young adult earning an average pay packet owning their own home have "collapsed" in the last 20 years.

By 2015/16, someone in the same age bracket had just a one in four chance of getting on the property ladder, the Institute for Fiscal Studies said - and it's down in large part to a sluggish 22 per cent rise in real incomes over those two decades.

Andrew Hood, a senior research economist at the IFS and an author of the report, said: "Homeownership among young adults has collapsed over the past years, particularly for those on middle incomes".

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

For almost nine in 10 adults aged 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.

Screen Shot 2018 02 16
One in four middle-earning young adults own their own home – down from two in three 20 years ago, claims report

- Young adults from more disadvantaged backgrounds are less likely to own their home, even after controlling for the kind of job they have and other characteristics. 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 their home.

John Healey, Labour's shadow housing secretary, said the research should be a "wake up call" for the ministers.

House prices have grown 152% over the last two decades.

The IFS study also comes as UK Finance figures showed that first-time buyer (FTB) numbers previous year reached the highest number since 2006, with 365,000 people getting on to the property ladder. "After nearly eight years of failure on housing, the government is still failing to tackle the fundamental problems with our broken housing market", he said.

Property has become so expensive that the average first-time buyer is now 30 years old and has a salary of £41,000 a year.

Figures published by the Office for National Statistics earlier this week revealed that house prices across the United Kingdom increased by 5.2 per cent in the year to December.

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