Deposit cost forcing young people to stay with parents
Almost 30% of 20-to 34-year-olds still live at home, the highest number since 1996, driven in part by the challenge of building a deposit, according to new research.
Bird & Co analysed ONS data on living arrangements and rents, alongside the HM Land Registry UK House Price Index, to measure how living arrangements have changed in the last 30 years.
In 1996, around 2.7 million 20- to 34-year-olds lived with their parents, roughly one in five. That has since risen by a million, or more than 40%, taking the share closer to three in ten.
More than a third (35%) of young men still live at home, compared with 22% of women, figures that have risen around 7-8 percentage points since the mid-90s.
Cost of deposit vs cost of renting
To understand why, Bird & Co measured the cost of a deposit against the cost of renting across 316 local authorities in England and Wales. It found that in some cities, a 10% deposit is equivalent to between 18 and 24 months of rent, while across all areas the typical figure rises to around 28 months, and in London closer to three years.
Daniel Chard, partner at Bird & Co, said: “For the majority of first-time buyers, the principal obstacle is not the monthly mortgage payment but raising the deposit. When that deposit is equivalent to two years of rent across much of the country, and considerably more in the least affordable areas, it is unsurprising that so many young adults are remaining at home. These are the highest numbers on record, and the cost of buying offers a plausible explanation.”
