Over half of parents charging rent to adult children living at home return some or all of the money to help them save for a property deposit, according to research by Nationwide Building Society.
The survey of more than 2,000 parents found that 54% use rent payments as a savings mechanism for their children’s homeownership ambitions. Parents charge an average of £303 per month in rent, equivalent to £3,636 annually.
Regional variations
Rent charged varies significantly by region. Parents in Greater London charge an average of £415 per month (£4,980 annually), compared to £187 per month (£2,244 annually) in Yorkshire and The Humber, and £211 per month (£2,532 annually) in the East Midlands.
London parents are also more likely to increase rent, with 75% having done so, compared to 46% in Yorkshire and The Humber. Overall, 61% of surveyed parents have increased rent charges to their adult children.
Formal arrangements
The research found that 21% of parents have a formal rent arrangement in place, with a further 14% considering one. Greater London parents are most likely to have formal agreements at 47%, followed by the East of England at 27%. Yorkshire and The Humber and East Midlands have the lowest rates at 5% and 6% respectively.
Parents demonstrated flexibility in rent collection, with 45% waiving payments once in the past year, and 52% allowing children to skip payments between two and six times annually. The survey indicated that one-third of adult children remain at home specifically to build savings for a house purchase.
Carlo Pileggi, Nationwide’s Head of Mortgage Products, stated: “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.” He added that the findings highlight that many aspiring first-time buyers without family support continue to face significant challenges in saving for a deposit.
Affordability pressures
The research revealed that 82% of parents believe rising housing costs make it more likely their adult children will continue living at home for longer. Additionally, 40% reported their adult child remains at home because they cannot yet afford to move out.
Ian Harris, President of NAEA Propertymark, commented: “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.”
The findings come as deposit requirements continue to present barriers for prospective homeowners. The extended period adult children are spending at home reflects broader challenges in the UK housing market, where the gap between earnings and property prices has widened in recent years.
