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Parental tenure and children's housing

How is young adults' housing shaped by the housing position of their parents?

Every summer a heated debate about housing inequality is prompted by the release of data on tenure trends gathered by the Department for Communities and Local Government's English Housing Survey. The figure below showing falling rates of homeownership and rising private renting usually attracts the bulk of the attention, with commentators concentrating on how young people today are finding it much harder than their parents to become homeowners (the trends in Figure 1.2 are especially pronounced if we only look at young adults rather than the whole population). This is thought to be creating inequality and tensions between the generations, leading to accusations that older people are 'hoarding housing' (Intergenerational Foundation, 2011) or the claim that the Baby Boomers 'took their children's future' (David Willetts in The Pinch, 2011)

 

 For blog post

Source: CLG (2015)

 

However, inequality between generations is not the only form of inequality that may be deepening as tenure patterns change. If homeownership in young adulthood is falling partly because it is becoming less affordable (it is important to note that declining affordability is not the full story- as I have written about in a previous post), then it may be that young people's homeownership and housing opportunities more generally are becoming more dependent on the background and affluence of their parents. Parental housing tenure may be a particularly relevant factor here as homeowners tend to have more resources available to support their children than tenants as they can access housing equity and typically enjoy lower lifetime housing costs. Although US and continental European evidence suggests that parental homeownership improves the housing opportunities of young adults, much less is known about whether this is also the case in Britain. Moreover, few studies have  been able to examine whether the role of parental housing tenure has changed over time.

 

The first project Briefing Paper examines the above issues by analysing:

  • How parental housing tenure is linked to the housing position of young people in their early thirties.
  • Whether the impacts of parental tenure changed over time between 1971 and 2011.

The findings, discussed in full in the Briefing Paper, show that:

  1. Young people born in the 1950s, 1960s and 1970s were consistently more likely to be homeowners aged 30-34 if their parents owned rather than rented their dwelling. While we know that disadvantage is transmitted from parents to children through educational attainments and jobs, this finding provides evidence that disadvantage is also transmitted down the generations through the housing system. This could hinder social mobility.
  2. Children born in the 1970s (but not the 1950s or 1960s) who grew up in social housing were more likely to be private renters aged 30-34 than their peers who grew up in owner-occupation. This indicates that having parents who rent is increasingly channelling young people into rented accommodation. This trend threatens to deepen inequality as private rental accommodation is often relatively more costly, less secure and of poorer quality than owner-occupied housing. Owner-occupation can also provide a way for people to build up an asset over time.

Taken together the results presented in the Briefing Paper clearly show that the catchy and popular idea of 'Generation Rent' is too simplistic. Yes young people are becoming more likely to rent and less likely to own- but there are also important differences between the genders and between young people whose parents rented and owned their dwelling. Inequalities between young people in the housing system should not be overlooked in debates about housing or the polarisation of British society.

 

Published 15/09/15