The number of under 35-year-olds who still live with their parents has risen by more than a third in the last decade, as young adults are trapped by rising house prices.
The 36 per cent rise means 1.23 million people aged 25 to 34 still live at home with their mother and father, an extra 331,000 compared to a decade ago, according to data from insurer Aviva.
It corresponds with a 45 per cent increase in house prices for first-time buyers, with figures from the Office for National Statistics showing values rising from £146,000 to £211,000 during the same 10-year time frame.
The number of UK ‘children’ aged 21 to 34 living with parents has also grown considerably during this period, from 2.2 to 2.9 million, an increase of 29 per cent.
One million adults still live at home with Mum and Dad as house prices continue to climb
Meanwhile a separate study by Aviva of the attitudes of 500 16 to 34-year-olds who live with their parents found that one in 12 don’t ever expect to leave their family home.
A third said they didn’t expect to ever own a home and a fifth thought they only would if they inherited one.
Almost half said they were ‘very happy’ about their current living situation, although this fell to just under a third for those aged between 30 and 34.
Nearly two thirds of those living with parents said it was because they couldn’t afford to move out, and a half said they did it to save money.
However a quarter said they liked being looked after and around a sixth said they are actually looking after their parents.
So, if you’re keen to move out of the family home, but are struggling to get on to the property, take a look at our possible solutions…
1. What should I do if I can’t afford to buy or rent near my family?
House prices around the country vary enormously, even from street to street in some areas. It is easy to restrict your house search around the familiar area of your family home, but try stepping out of your comfortable zone to find a more affordable area – be it for rental or to buy.
Adrian Anderson, director of mortgage broker Anderson Harris, said: ‘The home ownership dream is turning out to be impossible for a growing number of adults who are being forced to live with their parents for far longer than they had anticipated.
‘With options limited, would-be buyers need to get creative and perhaps consider moving to a more affordable area with a longer commute for work rather than a swanky pad in the most fashionable part of town.’
2. I don’t have enough for a deposit, is there a solution?
Many young buyers are turning to the Bank of Mum and Dad for a contribution towards a deposit as lenders require larger deposits to secure the most attractive mortgage rates.
However, if your parents – or grandparents – are unable to assist, you may want to look into using the Government’s Help to Buy equity loan scheme. This helps buyers with a 5 per cent deposit and provides a 20 per cent interest-free loan for five years.
Mr Anderson said: ‘The Bank of Mum and Dad is a popular option when it comes to drumming up a deposit and if your parents have funds available, it is worth asking them. However, this needs to be a gift rather than a loan or it will have an impact on affordability and the size of mortgage you can get.’
He added: ‘Other options may be to purchase with parents on a joint mortgage, sole owner basis, where parents’ income is taken into account in order to generate a bigger mortgage but they are not on the property deeds so you avoid paying higher stamp duty.
Alternatively, check out the Barclays Family Springboard or Family Building Society Family Mortgage where parents’ savings can be offset against the mortgage as security but they get them back at a later date.’
3. House prices are rising so fast that they are moving out of reach, what can I do?
One way of keeping your costs down is to consider building your own home.
While such a project may seem overwhelming, new technology means award-winning designs (such as the Modulhus) are available from £50,000.
However, the price of such projects tends not to include the land that the houses are built on – something which substantially drives up the price of new homes. Foundations also need to be laid before building can begin.
One way of keeping your costs down is to consider building your own home, such as with a Modulhus design costing £50,000
Lending is also more complicated than buying a typical residential property as a first-time buyer.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: ‘Building your own home is another way of becoming a homeowner while keeping costs down.
‘VAT refunds are available on building materials and services while self-builders tend to pay lower stamp duty because they pay on the plot rather than the finished property.’
However, he added a word of caution, saying: ‘This is a specialist area and seeking professional advice is crucial.’
4. I don’t earn enough, what can I do?
If you’re struggling to be eligible for a large enough mortgage on your own, try sharing the financial responsibility with a partner, friend or family member. There are mortgage products that can accommodate such partnerships
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: ‘An increasing number of first-time buyers are purchasing with somebody else – whether it’s a partner, sibling, friend or even parent. This can work out well – two lots of money towards the deposit and two incomes towards the mortgage, making it more affordable.
‘However, you should take care to ensure you get a legal document drawn up at the start detailing who contributed what and how you will proceed if circumstances change – for example if one party wants to move out and sell up.’
And he added: ‘It is also worth remembering that if you buy with someone else you are joint and severally liable for the mortgage, so if they don’t pay their share, you are on the hook for it.’