More than half of ‘Mumlords and Dadlords’ return child’s rent

Parents are helping their adult children onto the housing ladder, with more than half who charge them rent using the money to help their offspring buy their first home, research suggests.

The survey by Nationwide highlights the increasingly important role families – and the family home -, are playing in helping the next generation onto the housing ladder.

The surveyed parents charge their adult children living at home an average of £303 a month in rent, equivalent to more than £3,600 a year.

The building society has coined the terms ‘Mumlords’ and ‘Dadlords’ to reflect this arrangement.

However, the amount of rent paid varies considerably across the country, with parents in Greater London charging an average of £415 a month – or £4,980 a year – , compared with just £187 a month or £2,244 a year in Yorkshire and The Humber, and £211 or £2,532 a year in the East Midlands.

The poll of more than 2,000 parents with adult children living at home and paying rent found that 54% return some or all of the rent paid by their children to support their homeownership ambitions, effectively turning rent into a savings mechanism for a deposit.

The research also suggested that a third of adult children remain at home specifically to build savings for a future house purchase.

Behind many first-time buyer success stories are parents quietly helping along the way.”

Many parents are providing additional flexibility to their children. More than two in five – at 45% – parents have waived rent payments for their child once in the past year, while more than half – at 52% – say they’ve let children off rent payments between two and six times in the last year, reflecting the balancing act families face between managing household costs and supporting their children’s long-term financial goals.

While the journey to homeownership is taking longer for many aspiring first-time buyers, the family home is increasingly becoming an important stepping stone towards that goal.

More than eight out of ten – at 82% – parents say rising housing costs are making it more likely their adult children will continue living under the family roof for longer, while two out of five – at 40% – say their adult child remains at home because they cannot yet afford to move out.

61% of  [polled] parents have even increased the rent they charge their adult child.”

More than six in 10 parents – at 61% – have even increased the rent they charge their adult child. The London versus Yorkshire dynamic also continues when it comes to increasing the rent, with three quarters – at 75% – of Greater London parents saying they’ve done so, compared to less than half – at 46% – of parents in Yorkshire and The Humber.

One out of five – at 21% – parents admit to already having a formal arrangement in place, with a further 14% saying they would consider it.

Greater London parents are most likely to have a formal agreement in place – at 47% -, followed by those in the East of England at 27%.

Parents in Yorkshire and The Humber and East Midlands are least likely to have one, with only 5% in Yorkshire and The Humber and 6% in East Midlands saying they have a formal arrangement in place.

Helping hand

Carlo Pileggi (pictured), Nationwide’s Head of Mortgage Products, says: “Behind many first-time buyer success stories are parents quietly helping along the way and it appears they are using new tactics to support their children.

“As saving for a home remains as challenging as ever, our research shows many of Britain’s parents are using rent payments as a way to help their children build a deposit, turning the family home and time spent living at home into a stepping stone towards homeownership.

“However, the findings also serve as a reminder that many aspiring first-time buyers do not have access to family support and continue to face significant challenges in saving for a deposit.”

Ian Harris, President of NAEA Propertymark, says: “From an estate agency perspective, the impact of this affordability pressure is ultimately visible when people are ready to make their first move onto the housing ladder.

“Buyers are often having to plan for longer, save more and consider different routes to getting a deposit together, while family support can make the difference between being able to proceed and having to wait.

“The rise of the ‘Mumlord and Dadlord’ therefore reflects more than a change in family life. It highlights how the journey from living at home to becoming a first-time buyer is taking longer and becoming more financially complex for some people.”