Skipton Building Society conducted a poll of 2,000 renters and found that 91 per cent believed moving back home would be a short-term sacrifice for long-term gain.
More than a fifth – 22 per cent – said if they moved back in with their parents they would save enough for a deposit within a year.
The average rent paid by someone leaving their parental home surpassed £1,000 per month for the first time last year, according to data from Skipton Group’s subsidiary Hamptons. Skipton Building Society calculated that someone would have been able to save up to £12,290 if they had not moved out.
The mutual’s poll found that renters were only able to save £187 per month towards their deposit, but if they were to move in with their parents, this would rise to £808.
A fifth of respondents said it would take them more than five years to save for their first home while renting, and 63 per cent said their family could not contribute to savings.
A further 36 per cent said they would be able to pay off their debts quicker by moving back home.
Taking a step backwards
The idea of moving back home was not all positive for renters, as 52 per cent felt like it would be taking a step backwards.
Nearly a quarter said they would not want to live by someone else’s rules and 37 per cent said they did not want to give up their independence. Others were worried about the impact it would have on their parents, as 69 per cent said they did not want to be a burden.
More than a fifth would take the opportunity to get financial advice from their parents, while 45 per cent said they would enjoy the home-cooked meals. Some 60 per cent would enjoy spending time with family.
Getting renters on the property ladder
Jennifer Lloyd (pictured), head of mortgage products and proposition at Skipton Building Society, said: “People trapped in renting is one of the biggest housing challenges we face across the country, which is having a massive impact on the fabric of our society. With escalating rents and the cost-of-living squeeze further impacting people’s ability to save for a house deposit – it’s making it almost impossible for people to get onto the property ladder, so it’s no wonder we are seeing a rise in the number of tenants considering a move back home.
“For those fortunate and willing to make this move, then it might be a vital first step in helping them to boost their savings. However, as the research reveals, we know for many tenants, this isn’t an option for them.”
She added: “And this is why it is important renters have more options available like the Track Record mortgage for them to buy a home when building a deposit isn’t an option.”
Skipton Building Society launched its Track Record mortgage last year, which offers renters a mortgage at 100 per cent loan to value (LTV) and assesses affordability on their past rental payments.
So far, the product has received applications worth £62.4m and £29.7m in completions.
Lloyd said: “We want to empower more renters to achieve their homeownership aspirations sooner, without the help from the ‘hotel of mum and dad’ or ‘bank of mum and dad’ too.
“We know there isn’t one quick solution to addressing this huge societal challenge of tenants being trapped in renting cycles, with rents escalating faster than mortgage payments and the increasing costs of living, but doing nothing isn’t going to solve this UK housing issue.
“We know the Track Record product will not be able to help everyone and is only part of the solution for this group of people, but as a lender, we’re taking a stand to offer innovation in this space to help turn Generation Rent into Generation Buy.”
