Home ownership has 'collapsed' among middle earners, says IFS

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

The IFS said that for 90 percent of 25-34 year-olds, average house prices were more than four times their after-tax income, while this was true for under half of 25-34 year-olds in the mid 1990s. While those on middle incomes have seen the largest fall in ownership rates, those in the top income bracket have been least affected.

The economic research specialist said 8% of young adults on low incomes were home-owners now compared with 64% with high incomes.

It points out that 20 years ago, middle income young adults had home ownership rates much more similar to high income young adults and says that this sharp decline in home ownership among young adults has been driven by the rapid rise in house prices relative to their incomes.

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.

It found that those born in the late 1980s were much less likely to be homeowners in their late twenties than their immediate predecessors.

For almost 90% of 25 to 34 year olds, average house prices in their region are more than four times their annual after tax family income and for almost 40% house prices are more than 10 times their income.

Meanwhile, young adults from wealthy backgrounds were increasingly likely to own a property, compared to those from less privileged families.

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

Andrew Hood, senior research economist at the IFS and an author of the report, said house price rises outstripping wage growth had caused the dramatic decline in homeownership.

The IFS study also comes as UK Finance figures showed that first-time buyer (FTB) numbers a year ago reached the highest number since 2006, with 365,000 people getting on to the property ladder.

"But we want to go further and faster and our ambitious plan backed by targeted investment will help even more people by delivering the homes Britain needs for young families, key workers and those on low and middle incomes", he added.

"These squeezed millennials have seen the average house price rise seven times faster than their income".

John Healey, Labour's shadow housing secretary, said the research should be a "wake up call" for the ministers.

Property has become so expensive that the average first-time buyer is now 30 years old and has a salary of £41,000 a year.

She said: "The dramatic shift in the housing market for first time buyers is brought to light with a shocking 38% drop over a 20 year period".

Related news:

Hot News

isis-killer-beheading-video-story-top Rowdy family booted from ship after cruise turns to 'bloodbath'
Feb 17, 2018 - 00:55
Carnival Cruise Line has also launched an internal investigation into the incident, company president Sture Myrmell confirmed. Vision taken by a passenger has surfaced online of a brawl that broke out in a restaurant area on the ship.

isis-killer-beheading-video-story-top Ajit Pai's Sinclair Connections Now Under FCC Internal Investigation
Feb 17, 2018 - 00:08
Around the completion of the year, the premiere the interior watchdog for the F.C.C. unseal an investigation if Mr. Any claim that chairman Pai is modifying the rules now to benefit one particular company is completely baseless.

isis-killer-beheading-video-story-top Bill And Melinda Gates Are Not Happy About Trump's Budget Proposal
Feb 16, 2018 - 06:16
While jokingly saying the pair never disagrees, Melinda explained she gets the question "all the time", whereas Bill rarely does. He admitted that being on top as the wealthiest man was an "unusual position of having a lot of money to donate".

isis-killer-beheading-video-story-top Apple accepts HomePod leaves white rings on wooden furniture
Feb 16, 2018 - 06:16
The tech giant adds that the marks should disappear "after several days" or after they've been wiped with a cloth. If marks persist, clean the surface with the furniture manufacturer's recommended cleaning process.

isis-killer-beheading-video-story-top Barnaby Joyce says Malcolm Turnbull's comments were 'inept' and 'damaging'
Feb 16, 2018 - 06:16
Mr Turnbull can not sack his deputy because it is up to the Nationals MPs to choose their leader under the coalition agreement. Malcolm Turnbull says he has not asked Barnaby Joyce to resign and still has confidence in his deputy prime minister.

isis-killer-beheading-video-story-top Obama portraitists bonded the everyday and the extraordinary
Feb 16, 2018 - 06:15
When the 44th President of the United States saw the gorgeous greyscale image of his wife, his reaction was absolutely everything. The portraits paints a confident and approachable Michelle, in a dress by Michelle Smith's label Milly .

isis-killer-beheading-video-story-top Republicans Overtake Democrats Heading Into Midterms
Feb 16, 2018 - 06:15
But the state legislature remains a deep red with the GOP controlling the state house, senate and the governor's mansion. There were 44,218 ballots cast Tuesday, a turnout of about 36 percent of registered voters in the district.

isis-killer-beheading-video-story-top Trump Loses Another Appeals Court Ruling on His Travel Ban
Feb 16, 2018 - 06:15
The 4th Circuit found that Trump had expressed "what any reasonable observer could view as general anti-Muslim bias". The majority based its conclusion in large measure on statements Trump has made as a candidate and while in office.

isis-killer-beheading-video-story-top Gmail Go is the latest member of Google's Go app family
Feb 16, 2018 - 06:15
Up until now, Google has launched Go versions of popular apps such as Gboard , Google Assistant and YouTube . The size of the app goes up to 24.80MB as opposed to 47.28MB for the regular app.

isis-killer-beheading-video-story-top Would Sebastian Janikowski make sense for the Giants?
Feb 16, 2018 - 06:12
Janikowski said last spring that he hoped to still be with the Raiders when the team moved to Las Vegas in 2020. One is punter Shane Lechler, who also was drafted by Oakland and played the past five seasons with the Texans.

isis-killer-beheading-video-story-top Vikings Deny Giants ability to Interview and Hire OC
Feb 15, 2018 - 07:40
Shurmur and Stefanski first met with the Eagles 2005, when the former was quarterbacks coach and latter was an operations intern. With Stefanski out of the running, the Giants could turn to Eagles RBs coach Duce Staley as a fallback.

isis-killer-beheading-video-story-top Trump proposes 90 percent cut to Great Lakes cleanup program
Feb 15, 2018 - 07:38
President Trump pushed again Monday to slash funding for the Great Lakes - repeating a move he made unsuccessfully past year . Congressman Fred Upton, a Republican from MI , released the following statement: "Michigan deserves better than this".

isis-killer-beheading-video-story-top US President Donald Trump: Not Sure If Israel Wants Peace
Feb 15, 2018 - 07:37
The December 6 White House declaration recognizing Jerusalem as Israel's capital outraged Ramallah and others across the Muslim world.

isis-killer-beheading-video-story-top Denton County reports eighth flu-related death
Feb 15, 2018 - 07:25
Common symptoms include a fever of 100° Fahrenheit, headache, fatigue, cough, muscle aches, sore throat and runny or stuffy nose. Kris Box. "While some area clinics and medical providers have run out of the flu vaccine, we still have plenty available".

isis-killer-beheading-video-story-top USA govt plans to privatize International Space Station
Feb 15, 2018 - 07:11
The end of the shuttle program prompted NASA to turn over the business of supplying the station to private firms. It was an historic day here in Huntsville as the Marshall Space Flight Center hosted the State of NASA Address .