Young British adults’ homeownership circumstances and the role of intergenerational transfers

Ellie Suh

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Despite the continuing preference for homeownership, it has become increasingly difficult for young adults to own a home in Britain. House prices have increased faster than real earnings between the mid-1990s and the 2010s, resulting in significantly deteriorated affordability. Mortgage products have also become less accessible, as a large deposit has been required to secure the loan after the financial crisis of 2008/09. Previous studies point to the increasing role of intergenerational transfers in filling this gap. Some young adults obtain help from family to become homeowners, either receiving monetary support or by saving through living at the parental home. Using the Wealth and Assets Survey, this study attempts to examine the effect of these two types of family financial support on young adults’ homeownership circumstances, and controlling for other characteristics such as parental homeownership. First, it examines the characteristics of homeowners among young adults cross-sectionally using logistic regression. Second, by focusing on the non-homeowner subsample it analyses the effect of direct (money) and indirect (co-residence) family support on young adults’ entry to homeownership in the six-year period using discrete-time event history analysis. The results show that chances of young adults’ homeownership between 2008/10 and 2014/16 are very much tied to family support. The odds of becoming homeowners who have received direct or indirect support are found to be three times higher, even after accounting for other characteristics.

Keywords: homeownership; young adults; intergenerational transfers; parental support; inequality; housing market; Wealth and Assets Survey (WAS) (search for similar items in EconPapers)
JEL-codes: J01 N0 R14 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2020-07-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in Longitudinal and Life Course Studies, 1, July, 2020, 11(3), pp. 383-407. ISSN: 1757-9597

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:103970

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