Parental wealth really helps young people.

A new study by the Resolution Foundation has found that parental wealth really helps. When it comes to young people buying a property.

The Resolution Foundation is an independent British think tank established in 2005. Its stated aim is to improve the standard of living of low- and middle-income families.

Youngsters with access to parental wealth are nearly three times more likely to be homeowners by 30.

Youngsters with parents who have property wealth are nearly three times more likely to be homeowners by 30, according to the Resolution Foundation.

Its report found that parental wealth is almost as crucial as how much people earn when it comes to getting a home.

“Buying a home is almost impossible for many young people without access to the bank of mum and dad,” it said.

The report put together two sets of data.

The Resolution Foundation used data from the British Household Panel Survey (BHPS).  This is a long-running series of surveys. It also used data from its successor, Understanding Society (USoc)

What the research showed.

In the mid-1990s and early 2000s. Homeownership rates for 30-year-olds with parental property wealth were only twice that of young people whose parents did not own a home.

The gap has grown. Recent homeownership rates for 30-year-olds with parental property wealth are almost three times that of those without parental property wealth.

Young people with high levels of parental wealth benefit in other ways too. 

They are 74% more likely to have a degree than those without parental wealth and typically earn at least £500 more per month.

Both of these factors increase their chances of home ownership.

The Resolution Foundation added:-

‘Having a society where young people’s housing aspirations are so dependent on what their parents own is undesirable.’

It emphasises the need for politicians that say they want a socially mobile country to focus on wealth, not just income.

While building more homes will help. The report warned that policymakers will need to be more radical if they want to see real change.

High house prices are also being driven by long term declines in interest rates.

Stephen Clarke, senior economic analyst at the Resolution Foundation, said: –

“Our housing crisis is so big that what your parents own is becoming as important as how much you earn when it comes to owning your own home.”

“This is particularly worrying for the one in two millennials who aren’t homeowners, and whose parents also aren’t either.”

Mortgage broker Mark Harris, chief executive of SPF Private Clients, agreed,

“The majority of first-time buyers who come to us to get a mortgage have significant financial assistance from the bank of mum and dad,” he said.

“It’s the only way most youngsters can afford soaring property prices, both in terms of help with the deposit and also with the mortgage payments.”

RAMSEY LOMAX

“People struggling with debt should seek help as early as possible.”

This is good advice from a leading debt charity.  Taking the first step is always difficult but it is vital.   There is help out there and solutions that can help, but you need to take the first step towards getting good debt advice.  We have listened to the stories of 1000s of people and are constantly striving to help them.  It is our mission to explore all their options and find a solution to help them become debt free. And what’s more, we have helped 1000s to achieve their goals since 2007, over 11 years of dedicated advice.

Find out how Ramsey Lomax can help you and if you qualify to write off up to 80% of your debts.