Homeownership in the UK: The role of wealth inequality and family life cycles

Abstract

Homeownership is a valuable social institution, yet there is limited research on how wealth inequality and family life cycles influence the homeownership rate in the UK. This paper addresses this gap by using data from 1950 to 2022 and applying quantile regression methods to examine the effects of these factors on UK homeownership. The findings reveal that wealth inequality has a negative impact on homeownership, with its adverse effects becoming more pronounced at higher levels of the homeownership rate and diminishing as wealth inequality increases. Delays in family formation and life cycle transitions produce asymmetric effects — positively influencing homeownership at the lower quartile but exerting a negative influence at the upper quartile. Additionally, periods of Conservative Party governance are associated with lower homeownership rates. These results provide new insights into the interplay between socioeconomic dynamics and homeownership that suggest policies aimed at reducing wealth inequality and supporting family formation.