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Demography is Destiny

British homeowners are getting older

British homeowners are getting older

by Marcus Roberts | March 03, 2019

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One of the themes that we have often returned to in Demography is Destony over the years is the ageing of many countries (particularly in Western Europe and East Asia). By this we usually mean that the average age of a society is increasing as people are living longer and fewer babies are being born. But this report from the Guardian about the United Kingdom refers to another aspect of the ageing population phenomenon: the age at which many of life’s important milestones is increasing.

In 1997, the youngest age at which half of a population cohort owned their own home was 26 years old. (That is, in 1997 half of those aged 26 owned their own home. less than half those aged 25 owned their own home and more than half of those aged 27 owned their own home.) But by 2018, that age had increased to 34. More and more people are waiting longer until they enter into one of the most important milestones in life: the milestone in which they invest in a place, a community, and a place of security in which a family can be raised. It also means that the age at which people will be mortgage free is also increasing – buying a house at 26 means that you will be mortgage free by your mid-50s, whereas buying your house in your early 30s pushes the years of mortgage-payments into your 60s.

There are a number of reasons for this change in house owning practices. First house prices have increased by more than 270 per cent since 1997 (overall inflation has been about 79 per cent according to CPI since that date). Interestingly though, although perhaps not surprisingly, the average age at which more than 50 per cent of the population owned their own home was 28 in 2007. This means that the sharp increase in the age of home ownership has happened since the GFC. The cost of entry-level property has increased since the GFC of course, but also the mortgage lending restrictions imposed after the collapse of many banks has made owning a house dependant on a larger income than before.

Concomitantly with the rise in the age of home ownership is the rise in renting in the 25-34 year old age bracket. The proportion of this age cohort renting has increased from 35 per cent in 1998 to 55 per cent in 2018. Further, the average age at which people are leaving full-time education has increased from 17.8 to 19.3 years in the past 20 years. The age at which half the population is working full time has also increased to 19 years old. Finally, the first age at which more than half of young people left the parental home has risen from 21 in 1997 to 23 in 2017.

In short, the age in which we become independent of our parents, leave school, enter the workforce and buy a house and become beholden to a bank is rising. Is it any surprise then that the age at which we are getting married for the first time and at which women are having their first child is also rising (now well over 30 for both men and women in the UK for marriage and nearly 30 for women’s first child). While we are living longer on average, our emergence into adulthood and family life is also increasing. This is of course helping to keep fertility rates low and contributing to many countries’ demographic ageing and decline.

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