Why do so many young people still live with their parents?

Young people who return to living with their parents have been dubbed the “Boomerang Generation”. David Kingman asks whether this happens by choice – or if they are forced to by factors beyond their control

Since 1997, the number of people aged 20–34 who still live with their parents has increased by 28%. There are now 3.2 million Britons in this position and the number keeps on increasing, having risen by 6% during the last year alone, according to figures published in The Economist.

The newspaper argues that this is mostly the result of a shift in attitudes among British families, which has made it more socially acceptable for young people to stay at home for longer:

“Britain has become less like Scandinavia, where young people tend to leave home at 18 or 19 and never return, and more like a Mediterranean country, where kids can stick around for decades.”

The author of the article cites research conducted by Ann Berrington, of the ESRC Centre for Population Change at the University of Southampton, which shows that people who have degrees are much more likely to remain living with their parents. Women are 25% more likely than men to earn a degree, and since 1998 the proportion of women in this age bracket who still live their parents has increased twice as quickly as the equivalent figure for men.

The troubling element of this analysis, and this article, is that they implicitly place young people in a negative light. They are made to sound immature and feckless, too keen on their home comforts to strike out in the big bad world on their own. Is this a fair portrayal, or are there other factors at work?

The importance of economics

The article in The Economist does make reference to youth unemployment, pointing out that the number of 18–24 year olds living with their parents doubled between 2008 and 2012, when unemployment for that age group increased from 13% to 20%. Yet the author makes this sound like a minor factor, while the implications of high rents and tight mortgage criteria are dismissed in one line.

This risks doing young people an injustice. It also forgets the fact that the origins of great social changes often lie in economic developments.

For instance, the author makes the point that it’s considered normal in Mediterranean countries for children to live with their parents for many years into adulthood. Yet The Economist has also run many articles in the past which have emphasised the economic policies which tend to characterise Mediterranean countries, and how they work against young peoples’ interests, such as tightly regulated financial markets which make it harder to borrow money, widespread cronyism and rigid labour laws which protect older workers at the expense of high youth unemployment.

Rather than living at home for longer by choice, young people in the UK may be facing similar disadvantages which make it harder for them to fly the nest. The fact that graduates are more likely than average to stay at home might seem to argue against this, as you would expect graduates to earn more money than average, but this could partly be explained by the way that UK graduates are concentrated in London and the South East.

According to the ONS, 49% of Londoners are graduates, as well as 39% people in the South East, compared to an England average of 33%. This means that the highest concentration of graduates is in the part of the UK with the highest property prices and rental costs.

An earlier IF blog post has already explained that someone in their 20s would need to save at least 5% of their gross salary each year in order to get on the property ladder by the time they’re in their 30s, while the average amount that people actually manage to save is closer to 1.2%.

The most interesting evidence of all concerning the role of economics comes from a report which was released earlier this year by the Joseph Rowntree Foundation entitled Housing Options and Solutions for Young People in 2020, which used interviews to talk to young people about their housing plans between now and the beginning of the next decade.

This research suggested that approximately 4 million young adults will still live with their parents by choice, but as a pragmatic response to high housing costs rather than as a lifestyle decision:

“Currently, many more young people are choosing to remain in the parental home for longer until they are able to build up sufficient funds to make a first-time purchase… This group aspires to owner-occupation; however, these aspirations and their ability to access such tenure have been delayed by the recent economic downturn. Even with prolonged periods in the parental home, these young people face issues in gaining access to affordable mortgage products. Some of the young people consider home ownership to be a risk, and are therefore choosing to remain in the parental home until the housing and labour markets improve.”(p. 28)

This explanation clearly paints these young adults as a group with normal housing aspirations who are making an intelligent decision in the face of poor economic circumstances to save their money by living at home until their financial situation improves.

Cause or effect?

The real argument here is between cause and effect. Does the number of young people who still live with their parents reflect a genuine cultural change in attitudes towards the age at which someone is considered to have reached maturity? Are today’s young people really less independent (and possibly more feckless) than they used to be?

Or is it actually an effect forced upon the young by negative economic circumstances, who could argue that living at home while saving up for a property purchase is a savvier response to these conditions than paying the high rents that have resulted from the inflated and restricted property market?

The answer probably lies somewhere between these two ideas. In any case, the debate shows that the older generation should not be too quick to judge the stay-at-home young:  what they’re doing may turn out to be the smartest tactic of all.

Posted on: 29 October, 2012

4 thoughts on “Why do so many young people still live with their parents?

  1. Barry Pearson

    This article explores the reasons that young people have for living with their parents. Fair enough – it is an important question.

    But it omits an equally important question: “why do parents accommodate their children in this way?” (They don’t have to!)

    Often, perhaps typically, parents retain concern for their children throughout their lives. They knew that having children was a life-style choice that would leave them worse off financially for the rest of their lives. So in effect they have chosen to make a life-long investment in their children.

    This appears to be part of the evolution in how parents invest in their children. Both parents and children are adapting to a changing world, and adopting new ways for parental investment in their children to continue.

  2. Peter

    Runaway house prices resulting from the credit bubble are solely responsible for this phenomena.

    The idea that people in their mid-late twenties and beyond wish to live with their parents is laughable.

    I am 27, earn £29’800 per annum before taxes and currently have no chance of being given a mortgage. Not a chance. I therefore face a choice: rent forever or live with my parents until I save £50’000 for a deposit. I am in a far better situation than most having no student debt remaining and a fairly stable job. In the old days this would have allowed me a mortgage: this is no longer the case.

    Even if you earn the average salary (approx £25’000 per annum before taxes) a mortgage remains completely out of reach. Parents have happily sat, done nothing, watched their house price rise in multiples – and then wonder why their children return home unemployed after univeristy! It is completely absurd to blame this on the young – I want to buy a flat – I go to work – I son’t claim to be special and willingly represent the ‘average’ – and when the average person can no longer afford to buy a flat something is seriously wrong.

    Artificially high property prices are also killing our economy – property does not provide an economic return. Every extra pound we stash into an overinflated property market is a pound that could have been invested productively elsewhere. The system needs a serious realignment. Government need to step back and allow this to take place. The Bank of Englands Quantative Easing program is helping to maintain the asset bubble – this is not beneficial for anybody in the long run. If this continues we are going to end up in a globally uncompetitive stagnated economy with a devalued pound.

    I have put a fair amount of thought into buying a flat and have decided not to for now.

    I am waiting until the realignment occurs.

    It is fantastical to imagine that property is currently worth its ‘market value’. To take out a £250’000 loan – and purcahse a flat with a ‘real world’ value of 1/4 this would go down as one of the single worst financial descisions in my life. It would potentially put me in a negative equity situation for the next 30 years and ruin my entire working existence.

    Young people should not rush to join the property ladder. Young people are put under pressure to ‘get on the property ladder early’ by their parents – in my parents age this was probably true but this is no longer the case. Property currently has a far greater downside risk that upside ‘growth’ potential. It is actually comical to believe that property prices will rise – if you take out a mortgage now YOU WILL END UP WITH NEGATIVE EQUITY.

    You would have to be insane to take out a mortgage under these artificially high housing prices.

    Don’t do it.

    It will ruin your life.

  3. loz

    “why do parents accommodate their children in this way?”

    because they are your children! nothing is more sacred!

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