Are mid-earners locked out of buying a house in Thurrock?

Robyn Valdez
February 17, 2018

The chances of a young British adult owning a home on a middle income have been halved in the past 20 years, said research released on Friday.

'Home ownership among young adults has collapsed over the past 20 years, particularly for those on middle incomes. Between 2014 and 17, 30% of young adults with parents in low-skilled occupations such as delivery drivers owned their own home, compared to 43% of those with parents in higher-skilled jobs such as lawyers and teachers.

The odds of a young adult earning an average pay packet owning their own home have "collapsed" in the last 20 years.

The likelihood of a young adult owning their own home given how their income compares with house prices in their region is little changed from twenty years ago.

For 25- to 34-year-olds earning between £22,200 and £30,600 per year, home ownership fell to just 27% in 2016 from 65% two decades ago.

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The institute says that this dramatic rise in house prices relative to the incomes of young adults fully explains the falls in home ownership.

At the age of 27, those born in the late 1980s had a homeownership rate of 25%, compared with 33% for those born five years earlier (in the early 1980s) and 43% for those born ten years earlier (in the late 1970s).

The average United Kingdom house price was 152% higher in 2015/2016 as in 1995/1996 after adjusting for inflation, but the average after tax family income of 25 to 34 year olds grew by only 22% in real terms over those 20 years.

While homeownership among middle-income young adults has declined across Britain, it fell most sharply in the southeast, the figures showed.

The government abolished stamp duty for the majority of first-time buyers but was widely criticised after the independent Office for Budget Responsibility warned it would push up house prices, benefiting those who already owned homes.

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"Conservative Ministers have let down first-time buyers on ordinary incomes". After nearly eight years of failure on housing, the Government is still failing to tackle the fundamental problems with our broken housing market.

"With the average deposit for first-time buyers in the United Kingdom at £33,000, and an average wait of eight to 10 years to reach it, it's clear that much more needs to be done to help people on their journey".

'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, ' he added.

Figures published by the Office for National Statistics earlier this week revealed that house prices across the United Kingdom increased by 5.2 per cent in the year to December.

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