My view on the “Hotel of Mum and Dad”

The only surprise as I read the IFS’s recent “Hotel of Mum and Dad’ report was discovering that even today, ‘only’ 18% of young British adults (25-34 year-olds) live with their parents. That proportion has grown by a third over the past twenty years, but it still seems low. I have two working daughters living at home in London who are now in their mid-twenties, and all their friends do so too, except those whose parents live far away.

A closer read of the report acknowledges the ‘steep gradient by age’ in the proportion of young adults ‘co-residing’ with their parents, however: 43% of 25-year-olds (the exact age of one of my daughters) are living in the family home. By age 34, as you’d expect, it’s a much lower proportion, just 5% of women and 12% of men.

It makes complete sense for those in their twenties to live at home if there’s enough space - especially financially. Who can afford to rent, let alone buy their own home today? Average real property prices in England (i.e. adjusted for consumer price inflation) have doubled over the past 20 years (with London and the South-East seeing disproportionately high increases) compared with an average rise in real incomes for 25–34 year-olds of around 30% over the same period. Unsurprisingly, only around 10% of this age group are homeowners, even with a mortgage. Meanwhile, rents are exorbitant too, especially in London, where the average rent is around £1,000 a month (and you won’t get much for that in many parts of the capital).

My view is that while it wouldn’t work well forever – everyone needs their own space and independence – it’s a good arrangement for a few years for many parents and their young adult children. Few can afford to live well in a UK City on a ‘starter’ salary today, given high general costs of living – and even if they can, why not save on rent and bills for a couple of years? The IFS report talks about ‘financial transfer’ from parent to child as we effectively subsidise their livelihoods while they live with us; that sounds rather transactional but it makes sense. My husband and I own an asset in the form of our home and we are using that asset more if all the rooms are occupied.

But in all honesty, I like the arrangement much more than just for its common sense. It feels a privilege having these wonderful young women back home after their university days. They are great company. And we are happy to help ease the pressures as they find their feet in the world of work. One of my daughters often works long hours, but when she comes home late, a home-cooked supper is waiting for her, and her laundry is done. When I lived by myself (renting) in New York when I first started working, I earned decent money but barely ate as I threw myself into my new career. It wasn’t healthy - or sustainable. Luckily I returned to the UK and to friends and family in time to recognise I needed to balance things out better. At 21, I wasn’t really ready to live by myself in a big City and be a ‘real’ grown-up – and surely it’s neither unusual nor problematic to need or want a bit more time to be fully independent. After all, most of us spend the vast majority of our lives as fully-fledged adults with plenty of responsibilities.

But boundaries are important whatever the living arrangements. My daughters aren’t children and we have to respect that. They both have their own social lives, with boyfriends and plenty of friends. They are good at making the most of what London has to offer and often travel to interesting places – both in the UK and beyond – at the weekends.

With hindsight, I am not so sure my own generation benefitted from growing up quite so fast. It was great to be able to afford to rent by ourselves or with a couple of friends – but a nightmare to take on a big variable rate mortgage and then struggle to pay the bills as interest rates rose and negative equity trapped us in a tiny flat. It may not always be through choice that a young adult is living with their parents, but a few more years at home can give them breathing space in a challenging world, helping them to develop and hopefully have fun. I’m sure one or both of my daughters will be moving out before long – and I shall miss them, while enjoying seeing them take that next big step.