The influence of socio-psychological factors on housing tenure decisions among British young adults

Abstract

Housing is one of the most debated topics in any economy and particularly in the advanced economies. It is seen to be an influential factor in people’s social and family life. The housing market in the UK has had different price cycles in the past four decades and this had led to problems of tenure choice, wealth and housing imbalance among generations. More specifically, recent changes in tenure trends indicate that young adults are most likely to be caught in the middle between the decision of owning or renting (privately or socially). As the private rented sector continues to grow, young adults are mostly now found in the sector while home ownership has been shifting to older age groups. In the past, the literature had largely focused on the econometrics context on one end and the critical context on the other. This thesis, therefore, introduces a socio-psychological dimension to the econometric context; by investigating additional drivers applicable from individual social capital and neighbourhood contexts. Major empirical analyses involved the use of the quantitative approach to explore secondary data sources, such as the British Household Panel Survey and the British census and deprivation data to ascertain these factors as they associate with tenure shifts. These entailed (multi-level) logistic regressions of time to housing tenure decisions among British young adults, with the inclusion of interactions between their individual social capital and neighbourhood-level features in the models. Findings indicate that the interactions between economic and socio-psychological factors are important in helping to explain tenure shifts. It is also suggested that the private rented sector growth is likely to continue, at least to the medium-term amidst slow economic recovery, young adults’ cautiousness and strong support for home ownership. Consequently, home grown and adulthood socio-psychology are likely to continue as additional contributions to housing tenure decisions in British housing.