Homeownership among young Britons plunges compared with 20 years ago

Many people are now being forced to rent long into their thirties

People aged between 25 and 34 with after-tax incomes of between £22,200 and £30,000 had a one-in-four chance of being on the property ladder in 2015-16.

Two decades 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. While those on middle incomes have seen the largest fall in ownership rates, those in the top income bracket have been least affected.

Homeownership rates for middle income young adults may stabilise over the next few years, however, since house price growth has began to slow in most parts of Britain, Hood said.

The rise in house prices over the last two decades has led to just one in four middle-income young people owning their own home - down from two in three twenty years ago.

A study by the Institute for Fiscal Studies (IFS) looked at 25 to 34-year-olds on incomes falling into the middle 20 per cent - ie those with incomes of between £22,200 and £30,600 after tax, including their partner's wage.

The research found that those born in the late 1980s are much less likely to be home owners in their late 20s than their immediate predecessors.

Phillip Hammond attempted to give first-time buyers a break with his stamp duty cuts in November
Phillip Hammond attempted to give first-time buyers a break with his stamp duty cuts in November

The IFS's research also suggests that a person's background still has an impact as to whether they end up owning their own home, and how soon.

Local newspapers accused the explosion in house prices of having "robbed" the younger generation of the ability to buy their homes.

But Labour's Shadow Housing Secretary John Healey blasted the Government's response. "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. "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".

"Our research shows that first-time buyers can save up for a deposit five years faster by putting their money into property with a property ISA".

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.

There have been some positive signals for young buyers in recent weeks, as fresh figures showed the number of first-time buyers increased to the highest levels since 2006, helped by slowing house price growth since the European Union referendum.




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