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New Briefing Paper

last modified Jun 02, 2016 04:32 PM
Is parental background more important for young people's homeownership in places with higher house prices?

A new Briefing Paper examines whether young adults' homeownership prospects are more strongly influenced by the socio-economic status of their parents in parts of England and Wales where house prices are high. This could be the case if the credit and affordability constraints associated with higher house prices mean that a greater proportion of young people have to rely on parental support to access homeownership.

The results show that having socio-economically advantaged parents is more important for young adults' homeownership in areas with higher house prices. When prices are low parental background has a weaker impact on young people's homeownership prospects.This indicates that high house prices may impede social mobility in the housing system.

However, these patterns are not observed for everyone. Crucially neither parents nor prices have much impact on the homeownership prospects of young people whose personal circumstances make it unlikely that they will enter homeownership. Parents and prices only interact to shape whether relatively advantaged young people enter homeownership, and so unequal access to the Bank of Mum and Dad is not the only or perhaps paramount factor constraining social mobility in the housing system. (Dis)advantage may also pass less directly between generations as parents shape the housing prospects of their children by influencing their educational attainments, occupation and income.