With the ‘Bank of Mum and Dad’ now considered to be a key lender for first-time buyers, House of the Rising Son (or Daughter), published today by the Resolution Foundation, shows for the first time how important parental property wealth is in determining young people’s housing prospects.

The report finds that in the mid-1990s and early 2000s, home ownership rates for 30 year olds with parental property wealth were – at 40 per cent – twice that of young people whose parent did not own a home.

This gap has since grown so that recent home ownership rates for 30 year olds with parental property wealth are – at 25% – almost three times that of those without parental property wealth.

The reports notes that measuring the direct effect of parental property wealth on their children’s home ownership is difficult because the Bank of Mum and Dad actually pays out in other ways when it comes to children’s living standards. As well as greater home ownership, young people with high levels of parental wealth are 74% more likely to have a degree than those without parental wealth, and typically earn over £500 more per month. Both of these factors increase your chances of home ownership.

However the report shows that, even after accounting for these education and pay benefits, access to the Bank of Mum and Dad is independently driving up young people’s home ownership. In fact, the report finds that parental wealth has now become such a significant driver of young people’s home ownership prospects that it is catching up in importance to more obvious drivers, such as how much young people earn.

House of the Rising Son (or Daughter) finds that a family moving from typical to high parental property wealth (at the 75th percentile) is associated with a 9% increase in the probability that their children will become homeowners in a given year. This compares to a 15 per cent increase in the probability that someone becomes a homeowner if they have high, rather than typical, annual earnings.

The Foundation says that while it is natural for parents to want to help their children on to the housing ladder, it is not be the answer for all would be first time buyers, not least because half of millennials who do not own their own home do not have home-owning parents.

It adds that having a society where young people’s housing aspirations are so dependent on what their parents own is undesirable, and emphasises the need for politicians that say they want a socially mobile country to focus on wealth not just income.

While building more homes will help, the report notes that policy makers will need to be more radical if they want to see real change, with high house prices also being driven by long term declines in interest rates that are unlikely to be reversed anytime soon.

Stephen Clarke, senior economic analyst at the Resolution Foundation, said: “High house prices and sluggish wage growth have meant that being able to buy a home of their own is almost impossible for many young people without access to the Bank of Mum and Dad.

“In fact, our housing crisis is so big that what your parents own is becoming as important as how much you earn when it comes to owning your own home. This is particularly worrying for the one in two millennials who aren’t homeowners, and whose parents also aren’t either.

“These findings reinforce the need to think more broadly about what the barriers to social mobility are in 21st century Britain. We’ve always known that who your parents are affects what education you get and job you do. But increasingly the effect is continuing later into life by determining whether you are able to own a home of your own.”