The chart shows that 2011/12 marked the point that home-owning 25-34 year olds were no longer in the majority, surpassed by those that rent privately. In 2005/06, homeowners represented 56% of all households headed by 25-34 year olds, and renters, both private and social accounted for 44%. This picture has changed dramatically in the decade shown, with home ownership in this age bracket falling fairly steadily to 38.2% in 2015/16. Social renting has remained relatively stable in this period, but has reduced from 19.8% in 2005/06, to its lowest in 2015/16 of 15.7%. A large increase in the number of 25-34 year olds who rent privately is evident, almost doubling from 24.2% in 2005/06 to 46.1% in 2015/16. Home ownership began to increase again in 2013/14 rising by 2.4% in 2 years.
What does the chart show?
The graph represents a breakdown of all household where the chief householder is aged between 25-34, with their name on the either the rental contract or the ownership deeds. The blue line shows the percentage of such homes that are privately rented, the pink shows social renters in receipt of housing benefit. The black line represents the percentage of home owners. The data runs from 2005/06 until 2015/16 and originates from the government’s annual English Housing Survey. As such it covers the whole of England, including data from London where there is a disproportionately large number of renters.
Why is the chart interesting?
There has been much coverage of the decline in home ownership across the board, with particular focus on the plight of millennials, who have suffered from a range of economic disadvantages following the financial crash. Indeed record numbers of individuals in this age range remain living in their parents’ homes for far longer than in previous years. A recent study by an insurance company showed that in 2005, 27% of 25 year olds still lived with parents, whereas this figure rose to 33% in 2016. Recent reports indicate that the scale of lending from ‘Bank of Mum and Dad’ or ‘BOMAD’, has increased dramatically with parents projected to finance 26% of all mortgages in 2017, an estimated contribution of £6.7bn towards sales totaling £77bn. This is a growing trend that reflects the different economic circumstances between the generations: wage stagnation, the cost of university, the reduction in defined benefit pensions as well as the dearth of affordable housing (a product of both the promotion of buy-to-let as well as lack of supply).