House Price Surge Has Collapsed Home Ownership For Young Adults, New Research Shows

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 report by the Institute for Fiscal Studies (IFS) think-tank published on Friday revealed just 27% of 25 to 34 year olds who earn £22,200 and £30,600 per year owned their own home in 2015–16. But in 1995–96, 65% of that same group owned a house. John Healey, Labour’s shadow housing secretary, said the research should be a “wake up call” for the ministers. After almost eight years of failure on housing, the government is still failing to tackle the fundamental problems with our broken housing market,” he said. “Conservative Ministers have let down first-time buyers on ordinary incomes. They promised to build 200,000 new cut-price ‘starter homes’, but three years on not a single one has been built.” Andrew Hood, a senior research economist at the IFS and an author of the report, said the “collapse” in home ownership was down to the fact “house prices have risen around seven times faster in real terms than the incomes of young adults over the last two decades”. According to the IFS, homeownership for young adults has fallen furthest in the South East of England. The proportion of 25 to 34 year olds who own their own home has dropped by 32 percentage points in the South East (from 64% to 32%) and by over 10 percentage points in every other region.

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