Family formation, parental background and young adults’ first entry into homeownership in Britain and Germany

Abstract

Although previous research shows that family dynamics and parental socioeconomic status influence the timing of young adults' first entry into homeownership, much less is known about how the role of family factors may vary across countries with different housing systems. In this article, we use panel survey data from Britain and Germany to compare how family life course careers and parental socioeconomic background influence young adults' initial entry into homeownership in these two divergent national contexts. The results show that in Britain, first-time homeownership transitions are tightly synchronized with partnership formation. By contrast, in Germany first moves into homeownership typically occur later around or after the arrival of children. Parental owner-occupation accelerates entry into homeownership in both contexts, while the effects of other parental characteristics are relatively muted. Furthermore, the results highlight how individual socioeconomic factors are critical determinants of entering owner-occupation. This is particularly true in Britain where there is a strong socioeconomic gradient in first-time homeownership transitions.

Intergenerational transmission of housing choice: The relevance of green spaces for moving into a family house across social class

“…Individual characteristics that have been found to exert an influence on the likelihood of first‐time homeownership are related to the respondent's socioeconomic status and that of their spouse. A positive influence was found for higher education (Mulder & Wagner, ) but not so in a newer study for Germany (Bayrakdar et al, ), occupational prestige (Mulder & Wagner, ), employment or occupational status (Enström Öst, ; Kurz, ; Lersch & Luijkx, ), and income (Bayrakdar et al, ; Enström Öst, ), whereas not being in employment (Coulter, ; Mulder & Wagner, ) or being unemployed (Bayrakdar et al, ; Kurz, ) were found to decrease the likelihood of moving to a self‐owned home. Moreover, living with a partner or spouse was found to increase the likelihood of becoming a homeowner (Coulter, ; Enström Öst, ).…”

“…Parental homeownership was found to accelerate young adults' entry into homeownership in various contexts (Bayrakdar et al, ; Coulter, ; Kurz, ; Lersch & Luijkx, ; Mulder, Dewilde, van Duijn, & Smits, ; Mulder & Wagner, ), whereas other parental characteristics like education (Mulder & Wagner, ), single parenthood or step‐parenthood, and number of siblings (Bayrakdar et al, ; Lersch & Luijkx, ) were barely influential. There is evidence that the parents of home buyers are involved in an increasing number of property transactions in European countries (Ronald & Lennartz, ) and that the influence of parental tenure on the transition into homeownership has increased (Coulter, ; Kurz, ), especially in expensive housing markets (Mulder et al, ).…”

“…Moreover, living with a partner or spouse was found to increase the likelihood of becoming a homeowner (Coulter, ; Enström Öst, ). Migration background was found to be negatively related to homeownership in some countries but not in others (Coulter, ); for Germany, no influence was found (Bayrakdar et al, ).…”

“…Structural characteristics of the housing market and the overall development of wealth are normally controlled for with cohort dummies and regional information. The likelihood of homeownership was found to increase in younger cohorts (Kurz, ; Mulder & Wagner, ), whereas for urban areas, lower entry rates into homeownership were found compared with rural regions (Bayrakdar et al, ; Kurz, ; Lersch & Luijkx, ; Mulder & Wagner, ).…”

“…Like other assets, homeownership can be transferred between generations. People whose parents owned their house or flat are more likely to become homeowners themselves (Bayrakdar, Coulter, Lersch, & Vidal, ; Kurz, ; Lersch & Luijkx, ; Mulder & Lauster, ; Mulder & Wagner, ). On the one hand, the mechanisms are straightforward: inheriting property or capital, gifts, or parents as guarantors for a bank loan.…”