More than half of parents charging adult children rent to live at home are returning some or all of the money to help them build a first-time buyer deposit, new research reveals.
Nationwide finds 54% of rent-charging parents give some or all of the payments back to support their children’s homeownership ambitions.
Parents collect an average £303 a month from adult children living at home, equivalent to more than £3,600 a year, although the amount rises to £415 a month in Greater London.
The research, based on a poll of more than 2,000 UK parents with adult children living at home and paying rent, also finds 34% say their children are remaining in the family home specifically to save for a property deposit.
DEPOSIT SAVING
Nationwide’s figures illustrate how the family home is increasingly being used as a stepping stone towards homeownership as younger adults struggle with housing costs.
Some 82% of parents surveyed say rising housing costs make it more likely their adult children will remain at home for longer, while 40% say their child cannot currently afford to move out.
Parents are also proving flexible about payments. Some 45% have waived their child’s rent once during the past year, while 52% have done so between two and six times.
Average payments vary substantially across Britain, from £415 a month in Greater London to £187 in Yorkshire and The Humber and £211 in the East Midlands.
‘MUMLORDS AND DADLORDS’
Almost half of parents surveyed (45%) say they feel like a landlord to their own child, while 61% have increased the rent they charge.
Financial arrangements can create friction, however, with half reporting tensions or disagreements over money.
Carlo Pileggi, Head of Mortgage Products at Nationwide, says: “Behind many first-time buyer success stories are parents quietly helping along the way and it appears they are using new tactics to support their children.
“As saving for a home remains as challenging as ever, our research shows many of Britain’s parents are using rent payments as a way to help their children build a deposit, turning the family home and time spent living at home into a stepping stone towards homeownership.
“However, the findings also serve as a reminder that many aspiring first-time buyers do not have access to family support and continue to face significant challenges in saving for a deposit.”
AFFORDABILITY PRESSURE
Ian Harris, President of NAEA Propertymark (National Association of Estate Agents), says: “Parents are increasingly finding themselves wearing two hats: supporting their children while also taking on many of the responsibilities of being a landlord.
“With almost half saying they feel like a landlord to their own child, rising housing costs are clearly changing the dynamics of some family homes.
“Where an adult child is paying rent, even informal family arrangements can become complicated. Being clear about rent, bills, responsibilities and what happens when circumstances change can help avoid misunderstandings and financial tensions. With half of parents saying these arrangements have caused disagreements, a clear agreement can be valuable even within families.
“From an estate agency perspective, the impact of this affordability pressure is ultimately visible when people are ready to make their first move onto the housing ladder.
“Buyers are often having to plan for longer, save more and consider different routes to getting a deposit together, while family support can make the difference between being able to proceed and having to wait.
“The rise of the ‘Mumlord and Dadlord’ therefore reflects more than a change in family life. It highlights how the journey from living at home to becoming a first-time buyer is taking longer and becoming more financially complex for some people.”
