Home ownership and wealth inequality in Great Britain

Profile picture of Ricky Kanabar Profile picture of Paul GreggRicky Kanabar and Paul Gregg, from the University of Bath, present research on home ownership and wealth inequality in Great Britain.


What’s the issue?

Wealth is an important determinant of individual living standards, for example it allows individuals to maintain their consumption in the event of an adverse shock, what economists refer to as consumption smoothing.  Wealth can also help facilitate major lifecycle decisions, such as getting on the housing ladder.

Only recently has it been possible to show the extent to which individual’s wealth holdings differs across individuals at a point in time and how wealth accumulation varies over time for the same individual. Importantly, evidence suggests wealth holdings and hence wealth inequality is increasingly stratified by family background which is concerning from the perspective of improving social mobility (see Killewald et al. and Gregg and Kanabar).

It is important to note that certain types of wealth constitute a greater proportion of individuals and households’ total net wealth. In Britain this is typically housing and pension wealth (see Hamnett and ONS). Given the rapid increase in intergenerational wealth persistence in Britain (see Gregg and Kanabar and Blanden et al) it is therefore crucial to understand whether parental characteristics are increasingly associated with specific types of offspring wealth holdings, even after controlling for individuals’ own characteristics.

Our approach

Our research makes use of wave 2 – Round 6 of the Great Britain Wealth and Assets Survey (WAS), accessed via the UK Data Service. We use data from the WAS which contains estimates of individual total net wealth and its subcomponents for all survey respondents.

Importantly, because WAS is a longitudinal survey, we can track changes in individual wealth over time.  WAS also contains retrospective information on individual’s parent’s characteristics at the time an individual was a teenager. This includes information relating to housing tenure (two groups) and parent’s educational attainment (three groups), both of which have been shown to be good proxies of early life resources.

We follow previous studies and estimate the intergenerational correlation in wealth using a rank estimator. The rank estimator relies on ordering individuals based on certain characteristics, from lowest to highest value. Parental wealth rank, our independent variable of interest, is based on housing tenure and education interacted together.

For analysis purposes we define five groups (due to small cell sizes we combine individuals whose parents were medium or highly educated renters). Parent’s rank then takes the value 1-5, which is converted to a scale that runs from zero to one for estimation purposes.

Our dependent variable is offspring wealth which can take the form of total net wealth or one of the subcomponents of total net wealth (such as housing, pension, financial or physical wealth) available in WAS. We then derive the rank of offspring wealth, at their current age, based on their actual wealth as measured in WAS and transform this to take a value between zero and one for estimation purposes. We then estimate the association between parental wealth and offspring wealth (for further technical details regarding the modelling specification see our paper).

The fact WAS can be used on a cross section or longitudinal basis means we can estimate intergenerational rank correlations at a point in time and also study how such relationships change over time for the same individual.


We document several important findings.

We show inequality in offspring wealth is related to access to homeownership and housing wealth and such wealth is increasingly stratified by parental characteristics.

For individuals from the same family background but born six years apart, relative to the slightly older cohort, parental background is increasingly associated with offspring homeownership and housing wealth. Specifically, we estimate that over the six-year period 2010/12-2016/18 the association between the intergenerational rank correlation in housing wealth increases by 0.036 rank points. Given a base correlation of 0.18 our estimates imply a doubling in the rank correlation in approximately three decades.

We find that individuals from the most advantaged parental backgrounds (high educated homeowner parents) are three times more likely to report housing wealth by age 35 and the average level of housing wealth, conditional on holding, is roughly ten times higher (£10,535 versus £ 105,295 measured in 2022 prices) compared to individuals from the most disadvantaged background (low educated renter parents).

Comparing across cohorts, we find those individuals from the most advantaged backgrounds are no less likely to report homeownership and housing wealth compared to older cohorts, whereas the opposite holds true for those from the least advantaged background even after controlling for individual factors including education and earnings, which have been shown to be important in determining wealth accumulation (see Black et al. and Davenport et al.). Our findings highlight the perceived notion that access to homeownership for cohorts born post 1980 is more nuanced than is generally understood.

Policy implications

Without further policy intervention, a priori there is no reason to believe that the relationship we document between parental resources on the one hand and offspring wealth is unique to the sample period we study.

We do not expect a decoupling between parental homeownership and education for understanding intergenerational inequality and social mobility in Great Britain. Indeed, we believe these parental characteristics will continue to be useful markers of early life resources used in research for informing policies aimed at equalising opportunities.

Taken together our findings imply the penalty for being born to parents with relatively low resources is growing rapidly over time in Great Britain, to the extent that it is influencing major lifecycle decisions such as the ability for offspring to access homeownership opportunities and hence the rate at which housing wealth can be accumulated.

Despite various policies introduced to improve social mobility, such as the expansion of higher education which began in the 1960s in the UK, and more recently targeted policies to help young people access homeownership such as Help to Buy, our findings suggest family background has only become more important in determining offspring wealth.

Researchers have recently reconsidered the role wealth taxes could play in improving wealth inequality, or alternatively reforming certain regressive or inefficient elements of a country’s tax system, in the UK this includes inheritance, certain elements of capital gains and council tax (see Glennerster, Advani et al. and Prabhakar). There are various reasons why such ideas have not been taken forward or subsequently dropped in the past, this includes inter-alia behavioural effects but also due to political economy reasons. Better data and further research and understanding is needed on the exact design a wealth tax would take given such an initiative has not been actively discussed in the UK for 50 years, since which numerous economic and sociodemographic changes have taken place.


Our research has been used by the Social Mobility Commission to understand intergenerational wealth persistence in the UK. As of 2023, alongside a range of measures used to track social mobility in the UK, estimates of intergenerational wealth inequality are now reported annually on a statutory basis by the Social Mobility Commission as part of the State of the Nation report.

About the authors

Dr Ricky Kanabar is an associate professor of Social Policy at the University of Bath. His research interests focus on issues related to social mobility, ageing and health. His projects use microeconometric methods to better to understand important public policy issues. Ricky’s research has featured in various international peer reviewed journals and policy reports. I have worked with multiple government departments in England and also the Scottish and Welsh Governments. He has also contributed to work carried out by international organisations such as the OECD.

Professor Paul Gregg CBE was previously Professor of Economic and Social Policy in the Dept of Social and Policy Sciences, University of Bath. His research has covered Britain’s performance on wages, youth unemployment, workless households, child poverty, intergenerational mobility and the drivers of social disadvantage. During his career he has been a member of the Governments Commission on Social Mobility. He was also a commissioner on the Living Wage Commission that sets the Living Wage and he is a Research Fellow for the Resolution Foundation and has previously been part of the Foundations work on Minimum Wages and the design of Universal Credit. He was formally a member of the Council of Economic Advisors at HM Treasury 1997-2006, where he worked on unemployment, welfare reform and child poverty.

Leave a Reply

Your email address will not be published. Required fields are marked *