The Decline of Homeownership Among Young Adults (Cribb, Hood & Hoyle)
IFS briefing note quantifying the UK youth-ownership collapse birth-cohort by birth-cohort: homeownership of middle-income 25–34-year-olds fell from 65% in 1995–96 to 27% twenty years later, and the authors pin the cause on house prices rising far faster than incomes.
Summary
This Institute for Fiscal Studies briefing note (BN224) provides the sharpest UK cohort decomposition of the collapse in young-adult homeownership, using Labour Force Survey and Family Resources Survey microdata. It complements the Resolution Foundation's Home Affront with a birth-cohort lens and, crucially, identifies the driver — house prices outrunning incomes — that the young-locked-out-of-land-wealth claim rests on.
Key Findings (verbatim)
Ownership falls cohort by cohort.
"At the age of 27, those born in the late 1980s had a homeownership rate of 25%, compared with 33% for those born five years earlier (in the early 1980s) and 43% for those born ten years earlier (in the late 1970s)."[1]
The middle is hollowed out.
"In 1995–96, 65% of those aged 25–34 with incomes in the middle 20% for their age owned their own home. Twenty years later, that figure was just 27%."[1]
The cause is prices, not preferences.
"The key reason for the decline is the sharp rise in house prices relative to incomes. Mean house prices were 152% higher in 2015–16 than in 1995–96 after adjusting for inflation. By contrast, the real net family incomes of those aged 25–34 grew by only 22%."[1]
That last finding is the load-bearing one for the Georgist reading: the barrier is the price of land-plus-housing rising ~7× faster than young adults' incomes, not a change in taste or a transient shock. It aligns with Knoll, Schularick & Steger's decomposition attributing most of the house-price boom to land.
Relation to the Georgist Case
Cribb, Hood & Hoyle give the UK arm of the lockout claim its cleanest causal proximate mechanism: young households are priced out because house prices (mostly land prices) grew far faster than their earnings. A land value tax targets exactly that price gap. The middle-income figure (65% → 27%) also shows the lockout is not confined to the poor — it has reached the median young household.
Nuances and Limits
- Proximate, not ultimate. The note establishes prices-vs-incomes as the driver of falling ownership; the further step that untaxed land appreciation is an intergenerational transfer is the geoist interpretation layered on top, not a finding of this note.
- Great Britain, one period. Snapshot to 2015–16; later data (and the end of the low-rate era) should be checked before treating the gap as permanent.
- Housing, not land, is measured. Like most such work it prices dwellings; the land share is inferred from the decomposition literature.
Bears On
- Outcome: The young are increasingly locked out of land wealth — supplies the UK cohort figures and the prices-outran-incomes driver.
- Concept: Unearned Increment · Land Value Tax.
See Also
- Corlett & Judge — Home Affront (Resolution Foundation UK counterpart)
- A Lost Generation? Young Families' Wealth (St. Louis Fed) (US counterpart)
- OECD — Under Pressure: The Squeezed Middle Class
Sources
- Jonathan Cribb, Andrew Hood & Jack Hoyle (2018), "The decline of homeownership among young adults," IFS Briefing Note BN224, Institute for Fiscal Studies. Landing page · PDF (executive summary fetched and read this session) — used for the age-27 cohort ownership rates (25% / 33% / 43%), the middle-income 65%→27% collapse, and the house-prices-up-152% vs incomes-up-22% driver.