POLITICS

This Graph Shows Young People's Struggle To Buy Their First Home

15/07/2014 09:02 BST | Updated 15/07/2014 09:59 BST
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Young people's dream of owning their first home looks increasingly distant as a new study has shown how they have "borne the brunt of the recession", with wages and job chances suffering more than older generations.

The Institute for Fiscal Studies found that home ownership has increasingly fallen among the younger generations. Only 21% of people born in the mid 1980s had bought their own place by the age of 25 - compared with 34% of those a decade earlier and 45% born in the mid-1960s, the think-tank said.

young sold home The IFS' chart on home ownership across the generations

Meanwhile, among 22-30 year olds, household incomes fell 13% from the recession in 2007/2008 to 2012/2013, with wages slipping by 15% and employment by four points.

By contrast over the same period, those aged 31 to 59 saw income fall by 7%, pay by 6% and employment remain stable, and the over-60s saw almost no impact on those measures.

The IFS drew its conclusions from the most recent figures from the Government's Households Below Average Income data as part of work funded by the Joseph Rowntree Foundation (JRF) social research charity.

IFS research economist Jonathan Cribb said: "Pay, employment and incomes have all been hit hardest for those in their 20s. A crucial question is whether this difficult start will do lasting damage to their employment and earnings prospects."

JRF head of poverty research Chris Goulden said: "This research provides further proof that a shortage of affordable homes and the high cost of renting or buying a home is pushing hundreds of thousands more people into absolute poverty: 600,000 more people have found out what life is like below the poverty line after paying their housing costs.

"Over the past year young people aged between 22-30 in particular have fared the worst, seeing the sharpest rise of those now living in poverty. This is in contrast to pensioners, who the IFS say face relatively favourable conditions. The progress in reducing pensioner poverty shows what can be done with sustained effort - a principle that must apply across all age groups.

"The IFS report makes clear the worst is yet to come for struggling households: this year's figures do not factor in the large-scale welfare cuts introduced from April 2013. Even at a time where resources are limited, measures can be taken to reduce the hardship now facing almost a quarter of households.

"We need a comprehensive strategy and sufficient political will to get to grips with poverty. That means addressing low pay, the high cost of essentials, such as housing and childcare, and reform to the tax and benefits system to ensure work is a route out of poverty."

Labour treasury spokeswoman Catherine McKinnell said: "While David Cameron denies there is a cost-of-living crisis, these figures show people have seen a substantial fall in their income since 2010. The IFS's research shows that young people have been hit particularly hard over the last few years.

In response, a Treasury aide said: "This shows just how hard Labour's great recession hit young people and why it's vital we keep working through our long-term economic plan which is cutting the deficit, creating jobs and equipping people with the skills they need for the future."