Many parents are aware of the ‘bank of mum and dad’ concept, especially as the tough economic times have bit young people especially hard, however the ‘hotel of mum and dad’ also seems to be rising in popularity.
New figures from the Office of National Statistics (ONS) show that almost three million people aged between 20 and 34 are still living at home with their parents.
The number represents a 20% rise since 1997, when one in four men and one in seven women in this age bracket lived at home. Last year these figures had changed significantly, with one in three men and one in six women, aged between 20 and 34, living at home.
Stay at home children
It seems there a number of reasons why children are flying the nest at a later age, or indeed returning home after spells away, perhaps at university.
One of the main reasons seems to be house prices, which despite recent falls, are still unaffordable for many first time buyers.
The ONS said: “It is noteworthy that the increase over the past decade coincides with an increase in the average price paid by first-time homebuyers of 40% between 2002 and 2011”.
Compounding the problem of higher house prices is the issue of tighter mortgage lending criteria for first time buyers, including the need to find larger deposits, since the 2008 credit crunch.
Other contributing factors include increased university costs and higher rents, both of which make it harder for first time buyers to save for a house deposit.
Help for first time buyers
Over the past few months there has been an increase in the number of mortgage lenders offering 95% mortgages, and the launch of the government’s NewBuy scheme is also intended to help first time buyers wanting to buy a brand new property.
However, first time buyers are still finding it tough to get a mortgage, with many turned down for reasons which would have been overlooked by lenders prior to the credit crunch.
Despite the rise in the number of 95% loan to value mortgages available, many first time buyers have to come up with a significantly larger deposit, often forcing them to visit the ‘bank of mum and dad’ for a loan or a gift to help them get onto the housing ladder.
Research last year showed that the average first time buyer, who had not received parental help, was over 35 years old. Clearly many young people have decided to stay at home, rather than rent, until it is possible for them to buy their own home.
Perhaps surprisingly London, which has the highest house prices in the UK and is notoriously difficult for first time buyers to get onto the housing ladder, has the lowest percentage of young people living at home. Experts believe this is down to the fact that many young people leave home elsewhere in the UK to move to London looking for work or for education.
At just over 35% Northern Ireland had the highest percentage of young people living at home.
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