The Skipton Group Home Affordability Index, which uses census data to estimate that around five million adults live at home with their parents, suggested this figure goes down to 47 out of every 50 when looking at the average local flat.
The report said this was a national problem as in every region of Great Britain, less than 10% of adults living with their parents can afford an average first-time buyer home.
In London, the East of England and the South West, affordability dips below 1.5%.
Skipton Building Society said that even when a deposit requirement is removed, 97% cannot afford the average first-time buyer home in their local authority area.
It added that nearly 94% would face essential housing costs that surpassed 45% of their income even if they were to buy the average first-time buyer home in their area.
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Around 68% have never moved out of their parental home, and while nine in 10 hope to move out at some point, 82% of those saving for a deposit feel they are way off from saving enough.
Parents missing out on £72k windfall
Skipton Building Society added that having adult children living at home was also holding parents back.
The average amount of equity that could be released by homeowners with adult children living at home could be £72,400 if they were to downsize to a smaller home.
Skipton Building Society said that the average equity released would be equal to around 60% of their non-property net wealth.
The report said the average rental savings that could be gained by privately renting parents with adult children at home would be £2,400 per year if they downsized.
This could reduce the proportion of parents with adult children living with them facing unaffordable living costs by 14 percentage points, if using the affordability threshold of 45% of income being spent on housing costs.
Stuart Haire, Skipton Group CEO, said: “This data lays bare the systemic failure of our housing ecosystem. It’s a failure that is locking millions of young people out of independence, homeownership, and long-term financial stability. When 98% of adults living with their parents can’t afford to leave, they’re not just facing a housing crisis – they’re facing a crisis of opportunity.
“At Skipton Group, we are unwavering in our commitment to make home ownership more than a distant aspiration. Whether through our lending, our estate agency network, or through research like this, we are determined to help people take meaningful steps towards a home of their own.”
Affordability has ‘stagnated’
Skipton Building Society’s report continued that housing affordability has “stagnated” as while it has remained largely stable, the ongoing cost of running a home has worsened.
This was attributed to increases in energy prices and rent.
Looking at potential first-time buyers, the proportion who can afford to get onto the property ladder was 1.5% in the second quarter of this year, which was unchanged from Q4 2024.
The mutual is proposing practical solutions to boost the market, including reform of property taxes to remove the burden on first-time buyers and encourage “ease and flow of the market”.
Skipton Building Society is also advocating to protect and reform the lifetime ISA and innovate first-time buyer mortgage product design.
