Housing
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Intergenerational Centre

Housing hurdles

The changing housing circumstances of young people in Britain

Iman Acharya
Iman Acharya
Molly Broome
Molly Broome

The recent uptick in home ownership rates and fall in the share of income spent on housing among 25-34-year-olds represent a remarkably positive development in the largely bleak landscape of youth home ownership. However, these developments do not capture the full picture of the housing market for young people.

This note explores recent changes in young people’s housing circumstances within longer-term trends. While rising homeownership rates have reduced the share of income spent on housing, ownership among 25–34-year-olds remains far below previous generations. And significant inequalities persist across income groups and regions. Addressing barriers to homeownership and affordability must be a priority. The Government’s commitment to build 1.5 million homes is a step forward, but further action – such as re-linking Local Housing Allowance to local rents – could better support low-income families.

Key findings

  • Young people’s home ownership prospects appear to be turning a corner – younger millennials (born between 1991-95) are now slightly more likely to be homeowners by age 25 (14 per cent) than those born a decade earlier (13 per cent).
  • This trend coincides with the rise in home ownership across the 25-34-year-old age group, which broadly overlaps with those younger millennials today. Home ownership rates for 25-34-year-olds have increased by 6 percentage points since its low point in 2015-16 to reach 31 per cent in 2022.
  • The share of income 25-34-year-olds spend on housing has also fallen in recent years: the average share of income spent on housing in 2022-23 was 22 per cent, down from 27 per cent in 2015-16.
  • Despite these recent improvements, 25-34-year-olds today remain far less likely to own their home compared to those in the early 1990s (31 per cent in 2022-23 down from a peak of 55 per cent in 1990), 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 per cent).
  • There are also stark disparities across income groups. The recent uptick in homeownership rates for 25-34-year-olds has been the largest among middle and high-income families, widening the homeownership gap between them and families on lower incomes.
  • Families on lower incomes also face disproportionately high housing costs in relation to income – while fewer than one-in-four (24 per cent) young families spend more than 30 per cent of their incomes on housing costs, this proportion jumps to more than half (53 per cent) among families in the lowest income quintile.
  • High housing costs have significant implications for the financial resilience of young families – while 25-34-year-olds have £3,000 in savings on average, this drops to only £700 for those with housing cost burdens of over 30 per cent of their income.
  • Higher housing costs are also associated with worse mental health among young people, with 13 per cent of 25-34-year-olds who have housing costs greater than 30 per cent of their income reporting feeling anxious, compared to 8 per cent among the total age group, and only 1 per cent for those with no housing costs.
  • The new Government needs to address barriers to home ownership and affordability by hitting its target of delivering 1.5 million new homes by the end of this Parliament and permanently re-link Local Housing Allowance to cover the 30th percentile of current market rents.

Further reading

Housing hurdles
The changing housing circumstances of young people in Britain
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Iman Acharya, Molly Broome
Housing Outlook Q4 2024
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Alex Clegg, Lindsay Judge
An intergenerational audit for the UK
2024
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Molly Broome, Sophie Hale, Hannah Slaughter
Iman Acharya
Iman Acharya Research Trainee
Molly Broome
Molly Broome Economist