To put the wealth divide into perspective, the study found that for every £100,000 ($133,800) of extra property the wealthy parents had, the children were £15,000 ($20,000) better off in household assets when they reached their late twenties. It catapulted the social mobility of rich kids—who had enough funds to move to high-paying jobs in London—while the children of renters were blocked from generational wealth opportunities.
It didn’t matter what wealthy parents did for work, or what degrees they had: The study found the kids of rich homeowners benefited regardless. And a key reason why they were able to secure tens of thousands of dollars in wealth gains is because of location; those who benefitted most from the housing boom owned property in London or were able to move to the capital city brimming with better job opportunities.
“An important explanation for this finding is that the children of parents more exposed to the house price boom were more likely to own in London—the most expensive property market in the country,” the report explains.
“This is partly explained by an increased tendency of people whose parents did relatively well out of the house price boom, but who grew up outside of London, to move to the capital.”
The children of parents who fared better in the housing boom were less likely to take on middle-paying jobs outside of the U.K.’s capital, the study found. Instead, they were inclined to funnel into higher-paying occupations in the city compared to their family renter counterparts.
However, the benefits have not been equally distributed among the children of these housing-rich families. Their sons were the most likely to secure jobs at the top of the earnings distribution—meanwhile, there was “no significant effect” with the daughters. The study found that “wealth from parents may help male children in particular access better labour market opportunities.”
While rich kids are reaping wealth and career gains from their parents’ housing boom success, many in the U.K. have given up on buying a home with their abysmal salaries.
