Since the financial crisis, the personal finance pages have been awash with stories that is harder than ever for younger people to get onto the housing ladder.
The main issues facing first time buyers, have been rise in property values since the crash and the size of the deposit generally needed.
The problem has been made even more acute following the Mortgage Market Review, which in many circumstances, has tightened lending criteria and made it even harder for first time buyers to find a mortgage lender.
Despite Government incentives, such as Help to Buy, new figures from the Institute of Fiscal Studies (IFS), show that the percentage of younger people who own their own home has fallen dramatically over the past few years. At the same time the number of older owner occupiers has risen.
According to the IFS figures, the percentage of 30 year olds who own their home has fallen dramatically over the past few years:
- In 1994 60% of 30 year olds owned their home
- By 2004 this had dropped to 54%
- By 2014, just 10 years later, only 34% of 30 year olds were owner occupiers
The drop comes despite the average income of 30 year olds rising from £14,248 to £30,368 over the same period of time.
In contrast the number of older homeowners has risen over the same period:
- In 1994 63% of 80 year olds were owner occupiers
- By 2004 this had risen to 75%
- And by 2014 80% of 80 year olds owned their home
Why do more elderly people own their home?
It’s unlikely that there are many 80 year old first time buyers out there!
So the answer probably lies in the fact that it is this generation which had an increased opportunity to buy their own home through the wider availability of mortgage finance, mortgage interest tax-relief and the introduction of right to buy.
In addition since 1994 the average income of an 80 year old has risen by nearly £15,000 per year; making it easier to purchase a home and repay a mortgage.