Millennials whose parents don’t own a home are 60 percent less likely to become first-time buyers by the age of 30 thanks to the growing strength of the bank of mum and dad phenomenon, according to a report by The Resolution Foundation.
The report demonstrates the increasing influence of the bank of mum and dad, as in the 1990s and 2000s 30-year-olds with parental wealth were only twice as likely to own a home, compared with three times now.
Tax specialists at national law firm Irwin Mitchell Private Wealth say the findings are cause for concern when it comes to younger generations accruing wealth in the future.
Additionally, this increasing reliance on parents combined with an ageing population care crisis could lead to much intergenerational wealth being wiped out.
Andrea Jones, a tax, trusts and estates specialist at Irwin Mitchell Private Wealth, commented: “The results from this report are staggering: millennials’ wealth and homeownership patterns are vastly influenced by their parents’ wealth, and this is only growing in strength. If their parents don’t own property themselves, then they’re significantly less likely to own a home before the age of 30.
“This causes serious concern for the future when the aging population crisis is considered alongside it. If the current generations are waiting longer and longer to inherit wealth, buy a home or invest, this could have serious ramifications for the economy as it leaves young people tied to their parents and creates a wealth gap, leaving some in a much better position than others.”
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