Bank of Mum and Dad now helps 450,000 adults with their rent

Yound adults aged between 18 to 24 are more reliant on their parents

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The Independent Online

The so called Bank of Mum and Dad, known for helping young people get on the housing ladder, is now also helping people with the soaring cost of renting.

Some 450,000 adults across the UK need the help of their parents to afford their rented homes, accord to a new study from Shetler, a housing charity.

Shelter surveyed nearly 3,800 adult renters and asked how many have help from their parents.

UK’s housing crisis has pushed parents to subsidise children’s property costs by 1 billion a year, according to the study conducted for the Observer.

Young people are unsurprisingly more reliant on the Bank of Mum and Dad, with 11 per cent of adults aged between 18 to 24 receiving financial support from their parents. The number dropped to 8 per cent for those aged between 25 and 34.

Shelter estimates that the money spent by parents amounts to £850 million a year on their children's rent and £150 million a year on moving costs.

A May report commissioned by the insurer Legal & General found that parents will lend over £5 billion to their children this year, providing deposits for over 300,000 mortgages and purchasing homes worth £77 billion. 

Campbell Robb, Shelter chief executive, said that high housing costs mean it’s not that surprising that parents are no longer just relied on help with buying a home, but renting costs too.

“We know that the majority of private renters are forking out huge proportions of their income to cover the rent each month, and that’s not even taking into account the extortionate deposits and fees that need to be paid to even secure a rented home,” Robb said.

“For those who aren’t lucky enough to receive help from parents, expensive and unstable private renting leaves many struggling to make ends meet each month,” he added.

Theresa May said that we need to “deal with the housing deficit” in a speech in Birmingham just a few hours before being confirmed to be the UK’s next Prime Minister.

“Unless we deal with the housing deficit, we will see house prices keep on rising. Young people will find it even harder to afford their own home. The divide between those who inherit wealth and those who don’t will become more pronounced. And more and more of the country’s money will go into expensive housing instead of more productive investments that generate more economic growth,” she said.

“The new prime minister needs to give back hope to the millions of renters being left behind by our housing shortage, by quickly putting in place measures that will build homes people on ordinary incomes can actually afford,” Robb said.

Official statistics show there are 2.8 million adults aged between 21 and 34 sharing a house with their parents today. 

That’s up from 2.1 million in 2005, with statisticians citing the increasing difficulty of young people getting on the housing ladder as one of the driving forces behind the trend for multi-generational cohabitation.

The insurance group Aviva has forecast that if the UK house prices continue rising at the current rate, there will be around 3.8 million young adults living with their parents in 2025,  an increase of 1 million on this year’s figure.