According to the Office of National Statistics, house prices have increased by 270% in the last twenty years. A significant rise in house prices followed the financial crisis of 2008, the consequences of which, many young adults are still living with. This means that the average young adult now has to wait until they are 34 before they own their own home.

Average age rises from 26 to 34

In 1997, that average was 26, at a time when the house prices to income multiple was also more benign. These figures are all based on national averages, so the average age for a young adult in London and the south-east to become a home owner may well be far in excess of 34.

For the vast majority of young adults they appear impossible, as the gap between what people earn and house prices is now so vast as to be unbridgeable without very significant parental subsidy.

An insurmountable problem?

These depressing statistics from the ONS are further evidence of the sheer scale of the problems facing young adults in seeking to build the kind of independent, solvent adult lives that their parents generation saw as the norm. But things have changed since the young adults of the 1980s and 1990s were planting their feet on the property ladder.

They lived during a period of much more stable employment – indeed in many cases of employment for life – which allowed them to save more easily, and then plan with greater certainty. On top of that, they were not seeing their cash depleted, as is the case now, by having to fork out 60% or more of their post tax incomes on rent.

Rising rents and high house prices hold young people back

The collapse of mortgage opportunities for young adults has been a huge boost to the private rented sector, and has caused (especially in London and the south east) enormous increases in the cost of renting. The market has been flooded by millions of young people who cannot access the mortgage market, and are therefore compelled to rent…the net result is that rents go up, and up, and up.

All this is no surprise to anyone who spends any serious time looking at the world that young adults will now have to manage their way through. Once the statisticians have sufficient evidence, and there is always a time lag in the collection and analysis of stats, I have no doubt that they will be able to say definitively that the generation of young adults born between the mid 1980s and the mid 1990s, have made history. They are the first generation in living memory who will be worse off than their parents, and who will also experience overall worse economic conditions that their parents.

What a legacy we have bequeathed to them?

A planned programme of financial life skills education is neeeded

In these circumstances, the clumsy and half baked solutions we waste time and money on, in educating young people about finance, are laughable. What young people need is financial life skills education which knits together the set of key skills they need in a coherent and comprehensive form.

Lecturing them about how to ‘budget’ or the importance of ‘living within one’s means’ are hollow platitudes when compared with a fully planned programme of financial life skills education, delivered in an engaging way, and tailored to the real needs of young people.

If we fail to provide our young people with the skills and knowledge they need to give themselves the best chance of achieving their aspirations in this fast changing and more febrile economy, we are letting them down in a most shameful way.