Wealth from UK Housing Boom Helps Children of Homeowners Secure Better Jobs, Study Finds

It is well known that offspring from affluent families enjoy advantages in life—money and connections have historically helped them. Recent research reveals that British parents who profited from the nation’s property surge thirty years ago positioned their children for future achievement.

At the dawn of the 21st century, Britain experienced a sharp increase in property values: prices climbed from four times average annual income in 1995 to eight times by 2010. Property owners thus gained a substantial wealth boost, which led to their children acquiring greater property assets and better-compensated employment, according to the Institute for Fiscal Studies. Conversely, lower-income tenants encountered fresh affordability difficulties.

“This housing surge created massive wealth increases for certain families but not for others,” the report states. “Our findings demonstrate that property wealth, separate from other elements like parental abilities, significantly impacts inequality in the next generation.”

To illustrate this wealth gap, the study found that for each additional £100,000 ($133,800) in property owned by affluent parents, their children held £15,000 ($20,000) more in household wealth by their late twenties. This propelled the social advancement of affluent youth—who could afford to move into lucrative positions in London—while offspring of tenants were denied access to intergenerational wealth prospects.

Similarly, in the U.S., greater property values give parents extra resources to invest in their offspring, leading to better compensation compared to children from renting families.

Why offspring of property-boom parents hold an advantage

The occupations or qualifications of affluent parents proved irrelevant—the study revealed that children of wealthy property owners still gained advantages. A primary factor enabling them to obtain substantial wealth increases was geographic location; those who gained most from the property surge owned homes in London or could relocate to the capital, which offers superior employment prospects.

“A key reason for this result is that offspring of parents more affected by the property price surge had greater likelihood of owning property in London—the nation’s costliest real estate market,” the report explains.

“This is partially accounted for by a growing trend among individuals whose parents profited significantly from the property boom, yet who were raised outside London, to migrate to the capital.”

Offspring of parents who prospered from the property surge showed less tendency to accept medium-wage positions outside Britain’s capital, according to the research. Rather, they tended to gravitate toward better-compensated careers in the city in contrast to their counterparts from renting families.

Nevertheless, these advantages were not shared equally among offspring from property-wealthy families. Their male children showed the greatest propensity to obtain positions at the highest income levels—while daughters showed “no significant effect.” The research concluded that “parental wealth may specifically assist male offspring in securing superior employment opportunities.”

Britain’s housing affordability crisis and wage stagnation

While affluent youth harvest wealth and professional benefits from their parents’ property boom windfalls, many Britons have abandoned homeownership dreams due to meager wages.

British property ranks among the costliest in the developed world, per a 2024 Resolution Foundation analysis. The research discovered that British housing expenses exceed general price levels more than any other OECD nation, and English dwellings are more overcrowded than New York City residences. The typical UK home costs approximately £270,000 ($361,100). Renters also face an affordability crunch: with English rents projected to surge 25% over the next four years, according to real estate firm Hamptons International.

“Britain’s housing shortage has been decades in development, as consecutive governments have neglected to construct sufficient new dwellings or upgrade existing housing,” states Adam Corlett, chief economist at the Resolution Foundation. “This situation must now be addressed.”

Yet as property expenses rise annually, British workers aren’t experiencing equivalent salary increases—particularly young individuals at the lowest rungs. The typical income for working-age British graduates has declined compared to fifteen years prior, per government data cited by Bloomberg.

Generation Z earns merely two-thirds of what millennials made at equivalent career points, prompting many to question their prospects for success in Britain. One-quarter of British adults aged 18 to 30 are considering emigration, citing unaffordable housing and elevated living costs as primary reasons, per the Adam Smith Institute.