Home Affront: Housing across the Generations

Summary

This September 2017 report by Adam Corlett and Lindsay Judge — the ninth report of the Resolution Foundation's Intergenerational Commission — is the most thorough single account of how housing outcomes in Britain have diverged across birth cohorts. It compares housing security, affordability, and quality generation by generation from 1961 onward, and models millennials' future home-ownership prospects under optimistic and pessimistic scenarios.

Key Findings

1. Ownership halved at 30. "Today's families headed by 30 year olds are only half as likely to own their home as their parents were at the same age."
2. The deposit barrier exploded. The average young family must now save for 19 years to accumulate a typical deposit, compared with 3 years a generation ago — the report's central mechanism for why ownership rates "have tumbled."
3. Housing eats more of each generation's income. Millennials spend 23 per cent of income on housing at ages when baby boomers spent 17 per cent and the silent generation 8 per cent.
4. Even the best case doesn't close the gap. In the report's optimistic scenario (replicating the strongest ownership decade, 1981–91), millennial ownership by 45 still ends about 6 percentage points below the baby boomers; in the pessimistic scenario (repeating 2002–12), "less than half of millennials will buy a home before the age of 45 compared to over 70 per cent of baby boomers."

Honest Caveats the Report Itself Makes

The authors attribute part of the ownership decline to demographic change — "longer education, later coupling and later child bearing" — and to policy (Right to Buy boosting older cohorts' ownership). They also note that millennials who do buy face lower interest costs as a share of income than the previous two generations did at the same age, though capital repayments have "risen relentlessly from generation to generation." And they flag the open question of inheritance: older generations' housing wealth may eventually be bequeathed downward.

Bears On

• Outcome: The young are increasingly locked out of land wealth

See Also

• Narrative: The Housing Crisis Is a Land Crisis
• Knoll, Schularick & Steger — No Price Like Home
• Unearned Increment

Sources

1. Adam Corlett & Lindsay Judge (2017), Home Affront: Housing across the Generations, Resolution Foundation Intergenerational Commission — used for the halved ownership rate at 30, the 3-to-19-year deposit shift, generational housing-cost shares, and the ownership projections. PDF