Boomerang generation comes home to roost

Many young adults are moving back in with their parents, saving a bundle on rent and bills in the process – and developers are catching on. Graham Norwood reports
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The Independent Online

Mother and son Sheila and Chris Frampton may not know it, but they typify a new trend helping to mould the housing market – the rise of the "rent-free adult".

This is the housing industry's term for those, usually under the age of 35, who have lived away but return to their parents until they save enough for a deposit on their own home or look for work. Who aretherwise known as the "boomerang generation".

"Both Chris and my daughter Antonia left home at 16. I therefore bought a two-bedroom house thinking I'd be on my own or, perhaps, just be with a partner," explains Sheila, a public relations executive who was widowed seven years ago.

"But Chris has moved back from London. He's an actor and singer-songwriter and simply found it a struggle to make ends meet. As a result, he's with me for a while," she says. Chris, 23, will soon be joined temporarily by his sister Antonia, 20, who studies in Leicester but will stay with Sheila to recover from an operation. "Where Antonia goes, her boyfriend goes, so there will be four of us here," explains Sheila.

As a result, Sheila has taken drastic action to accommodate them. She has added a conservatory to her new Rydon Homes terraced house at Bourn Meadows in West Sussex, and has bought large sofas and blow-up beds.

"It's obviously a culture change after so many years away. As you grow up, you learn to do things your own way, even simple things like washing. When you return to your mother's house, you have to respect the way she does things," explains Chris, who used to pay £67 a week for a room in a shared house at West Ham in east London.

"We're in a lovely village now, but it's very different to London. It's half an hour to my friends in Guildford and if I drink I have to stay over there. The financial benefits are great to living back here but I don't go out so much now," says Chris, who hopes to release his first single later this year.

Research from Abbey Mortgages shows that Chris and Sheila's circumstances are increasingly common. The firm says 1.6 million young people aged 18 to 34 are living rent-free with family or friends, up from 500,000 in spring 2008. In addition, 300,000 older adults aged 35 to 54 are in the same position. Most "rent-free adults" are in south-east and south-west England, where house prices are at their highest.

"In the current climate, many people have little choice but to return home or turn to their friends or family for somewhere to live at no cost," says Abbey director Nici Audhlam-Gardiner.

Other statistics back up the trend. The Office for National Statistics says 58 per cent of 20- to 24-year-old males live with their parents; the total for females is 39 per cent. Higher-education accommodation offices say the number of students living at home is 73,000 – in 2003, there were fewer than 10,000. And research by the Skipton Building Society predicts that the number of what it calls "extended financial families" (that is, three generations of adults living under the same roof) will rise from today's 75,000 to 200,000 by 2016.

Businesswoman Lisa Margis, 28, is one of those who moved back to her parents' home, in Huddersfield, in a bid to clear her debts and save for a deposit.

"I left home at 18 to go to Manchester University. I graduated and then shared with friends, then rented with my boyfriend. When that relationship ended, I didn't want to go back to a student-type lifestyle so I had a conversation with my parents," she says.

She owes £3,000 on credit cards and has a repayment on her student loan deducted from her monthly salary. She does not pay rent but buys food and helps with specific bills. "If I paid £300 rent a month for a shared house, I'd be wasting money. I hope this route means I can clear my debt by Christmas and then save for a home," Lisa says.

The problem for Lisa, and tens of thousands like her, is that mortgage lenders now require much larger deposits than before, while building rates for new homes have plummeted since late 2007. This has exacerbated the shortage of small homes available to buy and, because demand for this type of property is almost always outpaced by supply, prices therefore remain relatively high despite recent reversals.

The government department for Communities and Local Government says the number of new private- and public-sector homes started in the first quarter of 2009 was 18,340 – down 44 per cent on the same quarter last year. Within that total, the number of private homes started was down 51 per cent on early 2008.

So what difference does all this make? "This trend isn't going to be short-lived, as the mortgage market will make it tough for first-time buyers for years to come. It also consolidates the trend away from moving every few years, towards fewer but longer-term moves," says Chris Keeping, a surveyor and property consultant in Greater Manchester.

He says: "So there's going to be more demand for larger-family housing in areas with an adequate shopping and transport infrastructure. There's going to be much less demand for apartments in city centres, which basically aren't equipped for family life."

Rent-free adults may contribute nothing to the household budget, but that doesn't mean they are not making their mark – just ask developers.

Aware that families will be living together longer, they have already started a sharp reversal of recent trends.

The proportion of apartments built had risen from less than 20 per cent of all new homes in 1997 to more than 45 per cent in 2007. But Britain's biggest developer, Taylor Wimpey, has already cut the proportion of flats it builds from 40 per cent in 2007 to 26 per cent today, while Barratt Homes aims to cut its emphasis on flats from 50 per cent now to 30 per cent within a year.

Family homes are back in fashion, it seems – and it may be down to the rent-free adult.