Young people starting out are three more times likely to be a homeowner by the age of 30 according to a report by the Resolution Foundation. The report found that when it comes to getting their own home, for many parental wealth is imperative.
Without access to the increasingly popular Bank of Mum and Dad, it can be almost impossible to save up for the deposit required and meet the affordability criteria set by many lenders.
The report gathered data showing that in the mid-1990s and 2000s home ownership among 30 year olds with parental property wealth were double that of young people who had no financial help from their parents or grandparents to buy their first home.
However, the gap has grown in recent years so that home ownership rates for those in their 30s who receive financial help from their parents is now three times that of those without the same level of family help.
It’s not just property that parental wealth can affect the lives of young people. The study also found that young people were 74% more likely to have a degree, and earn at least £500 more per month.
In a society where the housing aspirations of young people is so dependent on their parent’s financial situation needs to be addressed given that this highlights that our country is focused on not just income but also wealth and our society needs to be more socially mobile.
Building more homes will play a part in readdressing the situation, especially with government schemes to help young people buy their first home, but the report carried a warning 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.
The housing crisis is tremendous at the moment in certain parts of the country, and having a society where what your parents being as important as how much you earn when it comes to owning your own home is causing a divide and is a worry for the one in two millennials who aren’t homeowners, and whose parents also aren’t either.
The only way that many young people can afford soaring property prices in terms of the deposit and also with the mortgage payments is now to turn to their parents for help.
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