The Institute for Fiscal Studies (IFS) has published research indicating that the substantial increase in UK property prices throughout the 1990s and 2000s played a significant role in reducing social mobility. The report, released today, suggests that this period of rapid house price growth exacerbated existing inequalities, making it harder for younger generations without family wealth to achieve homeownership and accumulate assets.
According to the IFS analysis, the boom disproportionately benefited those whose parents already owned property. As house values climbed, these individuals were more likely to receive financial assistance or inheritances, providing a crucial advantage in a competitive housing market. Conversely, those from less affluent backgrounds, whose parents did not own homes, found themselves increasingly priced out, widening the wealth gap between the two groups.
This trend has profound implications for intergenerational fairness and the broader economic landscape. Homeownership has historically been a primary vehicle for wealth accumulation in the UK, offering both financial security and a means to pass on assets. The report suggests that the housing boom effectively locked many out of this wealth-building opportunity, entrenching economic divisions across society.
The findings underscore the challenges successive governments have faced in addressing housing affordability and social mobility. Policies aimed at increasing homeownership, such as Help to Buy schemes, have often been criticised for potentially inflating prices further or primarily benefiting those already in a stronger financial position. The IFS research provides a historical context for understanding the deep-seated nature of these issues.
The report highlights that the effects of this period are still keenly felt today, with younger adults often facing higher barriers to entry into the property market than their parents or grandparents did at similar ages. This creates a cycle where wealth becomes increasingly concentrated among those who have inherited it or benefited from early property ownership, limiting opportunities for social advancement for others.