Parental Co‐Residence and the Transition to Homeownership Among Young Adults in the UK

ABSTRACT Young people are living with their parents for longer. Little is known about how this behaviour, along with the divergent socio‐economic outcomes it entails, affects young adults' homeownership. Using UKHLS data adjusted for panel attrition, this study compares first‐time homeownership transitions between young adults living with parents (home‐stayers) and those who have left home to live independently in the private rental sector (home‐leavers), while accounting for the mediating effects of socio‐economic outcomes via the KHB modelling framework. The results reveal that, although home‐stayers experience higher unemployment, lower income, and residence in more affordable areas, these factors do not significantly affect transitions to homeownership. Instead, their higher likelihood of having savings and more favourable financial situations is associated with an increased probability of homeownership, while lower rates of partnership formation are associated with a substantial reduction. Once partnership formation is accounted for, the difference in homeownership transitions between the two groups disappears.