Renting and ‘The Hotel of Mum and Dad’ – a new analysis

Renting and ‘The Hotel of Mum and Dad’ – a new analysis


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This is by the Institute for Fiscal Studies

The rise in people living with their parents has been concentrated among those in their late 20s and varies substantially by ethnicity.

Between 2006 and 2024, the proportion of 25- to 34-year-olds living with their parents increased from 13% to 18%, hitting a peak of 21% during the COVID-19 pandemic before falling back slightly. 

The five percentage point rise since 2006 represents around 450,000 more young adults living with parents than if rates had remained at their 2006 level. Living with parents at these ages is particularly common among men, those on lower incomes and those from Bangladeshi backgrounds.

New research – ‘Hotel of Mum and Dad?’, funded by the Economic and Social Research Council, and published by IFS – examines who lives with parents, the drivers of this rise in living with parents, and the implications for young adults’ savings. The research finds that:

The rise in living with parents has been concentrated among those in their late 20s and varies substantially by ethnicity.

  • The share of 25- to 29-year-olds living at a parental home has increased from 20% to 28% between 2006–07 and 2023–24. In contrast, the share of those aged 30–34 living at a parental home has changed very little over this period;
  • Comparing ethnic groups, the largest percentage-point increase in the share of 25- to 34-year-olds living with parents was among those from Bangladeshi backgrounds, for whom the rate rose from 28% to 41% between 2006–07 and 2023–24.

25- to 34-year-olds have changed as a group since 2006 – for example, becoming more ethnically diverse, and less likely to be married or to have children. 

However, these changes in composition have not played a large role in pushing up the fraction of people who live with their parents, explaining at most one-tenth of the rise.

Other factors – such as declining housing affordability – have played a more substantial role in explaining these trends.

  • Increases in the rate of 25- to 34-year-olds living with their parents have tended to be higher in areas that have seen high house price growth since 2006. The largest increases over this period occurred in the South West, where the rate rose by 58%, and the East of England, where it rose by 56%;
  • Parents in their 50s and 60s and living in London, where house prices are highest, are particularly likely to have adult children living with them, consistent with those who grew up in the capital being more likely to live with their parents.

Those living with parents are a diverse group. Some are enabled by living with parents to save on rent and accumulate savings more quickly, reduce debts or increase spending. 

But for others, living with parents looks like a response to a negative event and is associated with falling wealth.

  • We estimate that those living with parents would pay around £560 per month in rent on average if privately renting – rising to £1,000 per month in London;
  • 14% of young adults living with their parents saved more than £10,000 in net financial wealth over a two-year period – i.e. an additional £400 each month. This rate is more than a third higherthan the 10% estimated rate for similar young adults in private rented accommodation;
  • However, those living with their parents are also more likely to see large declines in net wealth, indicating that the option to live at home is likely functioning as a safety net for some experiencing adverse events as well as enabling some young adults to save more.

Bee Boileau, Research Economist at IFS and an author of the report, says: “In the last decade and a half, there has been a substantial increase in the proportion of young adults living with their parents. This has occurred alongside – and indeed has been fuelled by – increases in rents and house prices.

“For some, living with parents provides an opportunity to build up savings more quickly than if they were renting – which is an especially valuable advantage in high-cost places like London. 

“However, others are likely to be living at a parental home due to a bad shock of some kind – such as the end of a relationship or a redundancy – or simply because they cannot afford to live independently.”

By the Institute for Fiscal Studies

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