Research from the Resolution Foundation has revealed that younger Millennials are seeing greater rates of homeownership at age 25 than older Millennials had at that age.
The research found that younger homeownership rates had risen by 26% since the mid-2010s.
People born between 1991 and 1995 were slightly more likely to be homeowners by age 25 (14%) than those born a decade earlier (13%).
However, it also found that middle and higher-income households gained the most in recent years, and that the property divide between rich and poor young people was widening.
Since 2015-16, homeownership rates among 25 to 34-year-olds in the middle third of the income distribution increased by nine percentage points, to reach 30%, and by six percentage points among those in the top third, to reach 52%, but only by three percentage points for the lowest third, to 13%.
Rich younger Millennials were therefore four-times more likely to own their own home compared with their lower-income counterparts, with the divide widening from 36 to 39 percentage points.
Despite recent improvements, young people today also remained far less likely to own their home compared to those in the early 1990s, at 31% in 2022-23, down from a peak of 55% in 1990.
They were far more likely to rent in the private sector, up from 10% to 33% over the same period, and far more likely to live with their parents, up from 16% to 22%.
The Resolution Foundation found that young people from poorer backgrounds were far more likely to live with their parents than those from richer families – 35% compared to 10%.
The share of income that young people (aged 25-34) spent on housing fell from 27% in 2015-16 to 22% in 2022-23.
However, the share of people experiencing ‘housing stress’ – spending over 30% of their income on housing – remained concentrated among poorer households and young people living in London.
Across the UK as a whole, 24% of young people experienced housing stress.
However, this figure rose to 53% of low-income families and 43% of people living in London.
Young people in the private rented sector also faced higher housing costs, spending around 31% of their income on rent on average, compared to just 12% for mortgagors (excluding principal repayments) and 5% for outright homeowners.
The Resolution Foundation called for the Government to build on these promising homeownership tailwinds for young people by hitting its housing targets, while also addressing the fact that many poorer families are missing out.
To do this, it said further action would be needed to increase access to affordable housing and alleviate the pressure on renters by re-pegging Local Housing Allowance to the 30th percentile of local rents.
Molly Broome, economist at the Resolution Foundation, said: “After decades of falling youth home ownership, Britain has finally turned a corner with the share of young homeowners growing consistently since the mid-2010s.
“However, poorer young people have largely missed out on this recovery, and the property divide among young millennials has widened as a result.
“Housing costs have also been falling recently, but the scale of the crisis that has built up means that housing stress remains rampant among young people – particularly among poorer families, Londoners and private renters.
“There is a still way long way to go before Britain can claim to have tackled its housing crisis, and the Government must ensure that people aren’t left behind in efforts to improve the outlook for young people.”
