For the first time in thirty years there has been an increase in home ownership for young families according to think tank.

New analysis from the Resolution Foundation has revealed that 190,000 extra young families aged 25-34 own their own home, the first rise for thirty years.

Improved credit conditions as the impact of the financial crisis recedes and a slowdown in house price growth has enabled young first time buyers become homeowners.

The proportion of home ownership for 25-34 year olds has increased by three per cent to 28% in the country since reaching the rock bottom level of 25% in 2016.

Young family owners half 1980 levels

Daniel Tomlinson a research and policy analyst at Resolution said, young family home ownership rates are still barely half as high as their late 1980s peak when half owned their own home.

If ownership rates hadn’t fallen sharply from this peak, 1.4 million more young families would be home owners today, says Mr Tomlinson.

For young families aged 25-34 living in London, Manchester, Liverpool, Brighton and Birmingham home ownership is the lowest in the country at 18% and likely to happen much later in life.

There is a divide in Britain between major cities and rural areas where half of all young families in areas like South Lanarkshire, South Hampshire and Central Bedfordshire own their own home.

Existing homeowners have gained from house price growth with home movers using existing equity to move up the property ladder.

For remortgage buyers higher prices give them an opportunity to release capital which they can use to improve their home such as adding an extension , bathroom or kitchen.

The rise in house prices allows the older equity release mortgage buyer to access wealth in their property and using this to maintain your lifestyle or help your children start or expand a business.

Majority will continue renting

In the long term low interest rates and a shortage of homes are increasing house prices and the minimum amount for a deposit so lower home ownership will continue in the future.

For first time buyers the Resolution analysis estimates it will take 18 years to save for a deposit relying on savings only from their own disposable income, compared to only 3 years in the mid-90s.

With a fall in home ownership and lack of social housing, there has been a rapid growth in young families renting privately with the private sector increasing from 9% in the late 1980s to 34% today.

The rise in the buy-to-let investor and recent legislation changes for mortgage stress tests means lenders require landlords to have higher rental incomes to cover interest repayments.

It means private rental are more expensive and shared residencies are more popular rising from 3% in the late 1980s to 12% of young families.

Daniel Tomlinson said, politicians should make more homes available to buy, use the tax system to favour first time buyers over second home owners and ensure that the private rental sector is fit for purpose.

What are your next steps?

Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or a buy-to-let investor.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to pay for care at home or pay university fees for grandchildren.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the property value tracker chart, mortgage monthly costs calculator and equity release calculator.