Publication type
Research Paper
Series Number
226/02
Series
IFS Working Paper Series
Authors
Publication date
January 12, 2026
Summary:
We study the impact of the UK house price boom on the intergenerational persistence of homeownership, housing wealth, location and earnings. Using price variation driven by geographic differences in the elasticity of housing supply, we find that increases in local house prices have a negative effect on homeownership and increase the intergenerational persistence of housing wealth. We show that by age 28 to 37 around 15% of parental housing wealth differences are passed through to children’s gross housing wealth. This is not explained by parental wealth gains increasing childrens’ likelihood of becoming homeowners, but is largely explained by the children of wealthier parents being more likely to move to and own a home in London. Moving to this high house price and high earning part of the country comes alongside an effect of parental wealth on occupation choice and a positive effect of parental wealth on the likelihood of being a top earner for men. Increased parental wealth causes larger wealth transfers to adult children. We interpret these findings with a model in which wealthier parents help their children overcome liquidity constraints to move to high house price parts of the country. Counterfactual simulations show that the UK house price boom doubled the intergenerational persistence of housing wealth and caused living in London to become more concentrated among the children of the wealthy.
DOI
https://doi.org/10.1920/wp.ifs.2026.0226
Subjects
#588897