The enduring decline in the ability of young people to afford their own homes appeared to have finally reversed. A report from the Institute for Fiscal Studies (IFS) revealed that homeownership among those aged 25 to 34 has rebounded to levels last seen in 2010, offering a glimmer of hope for first-time buyers.
According to the IFS study, the percentage of young adults acquiring their own homes has risen by 6 percentage points to 39 percent in 2022-23. This improvement has occurred despite the challenges posed by rising property prices and interest rates.
Nevertheless, the report also noted that homeownership levels for this age group are still down by 20 percentage points compared to the year 2000. The recovery has been mainly concentrated among those on middle incomes, with the disposable incomes of young adults growing faster since 2015 than the population as a whole.
The research findings provide a measure of relief for those who have been concerned about the declining trend in homeownership among young people. Jonathan Cribb, Associate Director at IFS, emphasized that the recent positive trends may be linked to better income growth over the past few years. However, he also stressed the need for continued attention, especially considering the impact of lower homeownership at younger ages on older individuals.
While the increase in homeownership among 25-34 year olds is a step in the right direction, the report still highlighted the challenges faced by the 45-59 age group, whose homeownership rates in 2022 were 7 percentage points lower than in 2010.
The study acknowledged the importance of addressing the issue of declining homeownership among young adults, as it has been a central policy concern. The observed recovery in homeownership for this age group since 2015 offers a glimmer of hope, although there is still work to be done to address the broader challenges faced by aspiring homeowners.
The recent findings from the IFS offer hope for young individuals aspiring to own their own homes while also serving as a reminder of the ongoing challenges that need to be addressed. As the housing landscape continues to evolve, the report highlights the need for continued efforts to ensure that homeownership remains an achievable goal for the younger generation.