The graph below shows how the prospect of owning a home has dramatically eroded since the Second World War - and that the housing ladder is close to disappearing for “Millennials”.
An analysis of official figures by the Resolution Foundation think-tank shows that home ownership has plummeted for people born after 1982 compared to their “Generation X” and “Baby Boomer” forebears.
It goes in that while more than half of under-35s on low-to-middle incomes owned their own property in 2000, the figure has fallen to just a quarter today.
And the picture is likely to get even more bleak: home ownership levels among that age group is set to approach 1-in-10 by 2025, and be more like 1-in-20 in London.
The graph shows that the level of home-ownership among among “Millennials” has fallen by 16 percentage points compared to those born between 1965 and 1981, so-called “Generation X”, at the same ages.
But “Generation X-ers”, too, find themselves lagging behind “Baby Boomers”, who were born between 1946 and 1964, as ownership rates are 10 percentage points lower.
Only the over-60s – a group including “Baby Boomers” and younger members of the “Greatest Generation”, namely those born before 1944 – record higher ownership rates than their predecessors.
Resolution Foundation, whose analysis of home ownership forms part of a wider study into living standards, says the prospect of owning a home is a “pipe dream” for any young person on a modest salary.
It warns that the solution to the house price crisis is to build more homes, and warns the Government’s Help to Buy scheme, which provides state-backed mortgages where first-time buyers only need a 5% deposit, is failing to help those on low to middle incomes.
More than half of those benefiting from Help to Buy to date have household incomes in excess of £40,000, it finds, much higher than average national salary of £26,500.
Half of under-35s on low-to-middle incomes owned their own property in 2000, the figure has fallen to just a quarter today
Matt Whittaker, chief economist at the Resolution Foundation, said: “Our findings highlight the extent to which the housing landscape facing young, working households on modest incomes has shifted in recent years.
“With the average modest income household having to spend 22 years to raise the money needed for a typical first time buyer deposit – up from just three years in the mid-1990s – it’s no surprise that owning is increasingly a pipe dream for many.”
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