Adult Children Live with Their Parents at Home as Rents and House Prices Rise

This alarming article by Tanya Powley of Financial Times on September 6th, 2013 reveals grown-up children are still living at home with their parents because getting on to the property ladder is increasingly difficult as rents and house prices rise.

“Empty nest” syndrome has become a problem of the past for millions of parents who have adult children in their twenties and early thirties still living at home.

The trend of young adults returning to live in the parental home – generation boomerang as they have been called – has grown in recent years, as rents and house prices have risen further out of the reach of would-be homeowners.

Three in ten parents have at least one child aged between 21 and 40 living at home, according to a survey published by the National Housing Federation on Friday. Two-thirds of these parents said their child could not afford to move out.

The poll, which surveyed more than 1,100 parents, highlighted the emotional and financial burden parents face and why the returning offspring have been given another nickname: Kippers – kids in parents’ pockets eroding retirement savings.

One in five said having a grown-up child at home had caused them stress, while a further fifth said it had given rise to family arguments.

“Moving out and setting up a family home of your own is a normal rite of passage,” said David Orr, chief executive at the National Housing Federation. “Yet as rents, mortgages and deposits continue to soar out of reach, it is no longer an option for many.”

Official figures show the number of young adults living at home has jumped by 20 per cent since 1997. According to the Office for National Statistics, almost 3m Britons between the age of 20 and 34 now live at home – of which 1.8m are men.

Amanda Lightstone, a 57-year-old dental nurse, has her youngest son, Andrew, 25, living with her in her three-bedroom house in Edgware, northwest London. She has already lent more than £100,000 to her older sons to help them buy their homes and said she will do the same for her youngest.

“How will he save for a deposit if he starts renting? He will live at home for quite a few years – he’ll be more than 30 when he can afford to buy his own place. I will just have to delay my retirement plans, you can’t have everything!” said Ms Lightstone.

Ann Berrington, professor of demography at the University of Southampton, said the percentage of young adults in their twenties living with their parents has increased since the recession.

Her analysis of the 2008 and 2012 UK Labour Force Surveys found the percentage of women aged between 21 and 22 living at the parental home rose from 46.4 per cent to 55.6 in the four years to 2012.

“The lack of affordable housing is clearly a factor as well as having to raise bigger deposits, but there are other factors at play,” said Professor Berrington.

While research published on Friday showed that in July the number of first-time buyers was at its highest since November 2007, according to LSL Property Services, transaction levels are still significantly lower than at the peak of the housing market.

Local government department figures published on Thursday showed that the government’s housing schemes, which aim to make it easier for people to buy a home with just a 5 per cent deposit, have made little headway.

According to the government, 3,749 people have bought a home through its NewBuy scheme launched in March 2012. This equates to less than 5 per cent of its 100,000 target. The second part of the scheme has had a bigger impact, with 3,000 sales and 10,000 reservations since April 2013.

Paula Higgins, chief executive of the HomeOwners Alliance, said: “We haven’t been building enough houses for 30 years and this is a real embedded crisis that’s not going to go away.”

Article Source:  http://www.ft.com/intl/cms/s/0/eb71071c-163e-11e3-a57d-00144feabdc0.html#axzz2e596ach1