Homeownership for young adults slips further out of reach

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The average house prices, the report adds, were 152 per cent higher in 2015-16 than they were 20 years earlier after adjusting for inflation, while real net family incomes for those aged 25-34 had increased by only 22 per cent over the same period.

"The reason for this is that house prices have risen around seven times faster in real terms than the incomes of young adults over the last two decades". While those on middle incomes have seen the largest fall in ownership rates, those in the top income bracket have been least affected. Those born in the 1970s were nearly as likely as their peers on higher wages to have bought their own home during young adulthood.

In London, house prices are 17.5 times higher than average incomes for these young people, compared with four times as high in the United Kingdom as a whole.

Home ownership among the middle income earners aged 25 to 34 has fallen from 65 percent two decades ago to 27 percent in 2015 and 2016, according to findings from the Institute for Fiscal Studies, reported Xinhua.

The finding tallies with an earlier warning from the IFS that wealth is likely to become more concentrated in older people as the young struggle to buy homes at a time when they are having to pay more towards pensions and bear the brunt of weak wage growth since the financial crisis.

The IFS report looked at the relationship between the incomes of young adults and house prices in their region over the last 20 years, to explain the receding homeownership rates.

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Meanwhile, young adults from wealthy backgrounds were increasingly likely to own a property, compared to those from less privileged families.

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

"However, it is also because the generations of first time buyers do not have the same access to funding as those before them". After nearly eight years of failure on housing, the Government is still failing to tackle the fundamental problems with our broken housing market. 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.

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.

"With the average deposit for first-time buyers in the United Kingdom at £33,000, and an average wait of eight to 10 years to reach it, it's clear that much more needs to be done to help people on their journey".