Parents are collectively spending £20.1 billion a year while they provide a roof over their adult children’s heads and save for a home of their own.
New figures from Aldermore show that 22% of wannabe first time buyers are currently living with their own parents, a quarter of whom say they will stay in the family home for five years or more to build a deposit.
Yet while living at home makes it easier for adult children to save, it’s hitting their parents in the pocket. The research found it costs parents an additional £416 a month in food, drink, petrol and energy bills, which racks up to an eye-watering £4,996 a year. For parents of kids who move home for five years that means a total cost of £24,979 or £14,988 if they only stay for three years.
Aldermore claims one in three are saving less for their retirement as a result of these additional costs.
The commitment is also having a psychological impact on both the parents and children. Nearly one in three parents don’t feel they have the freedom they are used to with the children back home while a third also think it is having a negative impact on the relationship with their child. Unsurprisingly, a quarter of aspiring first time buyers say living with their parents makes them feel like a child again, one in six believe they are a burden and a quarter are frustrated but realise it is, at least, a means to an end.
Charles McDowell, commercial director for mortgages at Aldermore says: “First time buyers have a notoriously difficult time getting on the property ladder. Since saving an adequate deposit remains the biggest obstacle, more and more people have had to move back into the family home to boost their savings.”
He adds: “Our report reveals just how difficult this can be to navigate, with real impact not just on parents finances but also on the relationship with their children and their own ability to save. Furthermore, as parents are less able to save for their retirement, more people will require help to unlock the value held within their property in later life. This is an intergenerational problem that goes beyond the simple view of the Bank of Mum and Dad.
As a result, Mr McDowell says tackling issues of house prices and housing supply must be a priority for the new government. “We believe strongly that first time buyers are the driving force of the property market but our index reveals just how hard buying a first home really is. Low levels of confidence amongst this group will have ramifications further up the housing chain so it’s imperative that more support is offered.
“We know that first time buyers are relying on the new government to provide much needed solutions but following the recent General Election, housing policy is likely to be reviewed again under the newly appointed housing minister, meaning it remains more uncertain than ever.”