Trying to save a deposit for a house in London? Move back in with mum and dad and you could save up to £17,000 a year…
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Much has been written about the ‘Boomerang Generation’, defined as young adults graduating from college or university and immediately returning home to their parents house to save money.
The BBC writes that Empty-nesters ‘resent boomerang kids’, while The Guardian reports that Boomerang children can be good for family relationships – study. But with London house prices being as they are, who can blame them? Especially when boomerangers can save up to £17,000 a year.
That figure comes from a recent Barratt Homes survey, which asked more than 1,000 parents with boomerang children living at home and found that, on average, children are banking more than £5,800 each year, reaching £9,000 in Brighton and £17,000 in London.
Of the 1,000 parents surveyed, 98% believe that children over 18 should contribute financially towards the household, yet over half don’t actually charge their children anything. Those that do charge up to 90% less than the average cost of rent, bills, food and general living costs in the UK.
That means the boomerang generation is saving almost £500 each month living at home – a figure that rises to more than £1,500 in London – compared to what they’d be spending in a shared two-bedroom apartment.
Not only is the Bank of Mum and Dad being called on more and more to help young adults onto the property ladder, parents are also expected to operate the Hotel of Mum and Dad, playing the role of landlord in the interim.
Parents in London are charging their children £62.69 a month in rent on average, plus £22.32 towards bills, £26.23 towards food, £10.51 towards household toiletries like toilet roll and toothpaste, adding up to a monthly charge of £121.75 a month.
‘London’s boomerang generation is saving £1,436.12 a month and £17,233.44 – a saving of 92% against the average living costs’
With the average cost of rent and bills in London running at £1557.87, this means London’s boomerang generation is saving £1,436.12 a month and £17,233.44 – a saving of 92% against the average living costs.
In three years, that’s a whopping saving of £51,700.32, but with the average London house price coming in at £478,853, according to the UK House Price Index of May 2018, that will only just edge you over that 10% minimum deposit required for a decent mortgage.
A further notable finding from the research suggests that higher income households – especially those with parents bringing home a combined £75,000 or more – request the largest contribution from their children despite having the most disposable income.
Explore the research and results in more detail here: barratthomes.co.uk