Rent vs B’N’B of Mum & Dad – we “do the math”

It is one of the biggest economic and social shifts of our time; millennials locked out of our pricey housing market are forced to either rent or live in the family home for longer. It is also one of the most difficult financial sums we have to do; will staying with Mum and Dad really be a better option than striking out on your own? Luckily, the Young Money Blog has done some of the thinking for you. Here is our handy guide to renting versus living with M&D so you can make the right call…

Iona Bain

According to the Office for National Statistics, around 25% of 20 to 34-year-olds are living with their parents, up from 21% in 1996. 

And the latest figures from Mintel show that 1.5% of all 25 to 34-year-olds moved back home in the last 12 months. It might not sound like many – but this is actually a whopping 120,000 young “boomerangers”, heading home after uni or a spell of independent living.

The “bunking-in with mum and dad” trend isn’t only happening on this side of the Atlantic: a study in 2016 found that more people aged 18 to 34 in the US were residing at home than in any other living arrangement.

Living at home with your parents, as an adult, isn’t a new phenomenon: back in the 1940s, staying at home until you got married was the norm.

In the current economy, with salaries stuck and the cost of living going up, it’s really hard to get on the housing ladder. Soaring rents and the sheer amount of money needed for a deposit are enough to make anyone think twice about ditching the comfort (and affordability!) of their childhood bedroom.

If you’re lucky enough to have the option – and weighing-up staying at home vs. going it alone – here are some things to consider:

The cost of renting

The biggest perk of getting your own place is having more independence and personal space: so the hefty cost of renting could be a price worth paying. 

According to the latest data from the HomeLet Rental Index, the average rent in the UK is £895 per month – a pretty big dent in your monthly income.

But there are cheaper ways of renting. You could look at creative options, like living on a boat, becoming a lodger or even property guardianship.

If you decide to rent, here are some top tips:

1. Avoid moving in with people at different life stages to you – your expectations (and lifestyles) might not be a good match

2. Stay on the same page as your housemates – make a formal agreement about what you’ll all be paying

3. Make sure your deposit is in a deposit protection scheme – don’t lose money to an unscrupulous landlord

4. Avoid opening a joint bank account with housemates – you risk affecting your credit rating

The cost of living at home

At home with your folks, you’ll probably benefit from reduced living costs – otherwise known as greater financial security. Staying there might mean sacrificing a level of independence, but if you can save-up for a deposit for your first home, or whatever future plans you have, it could be worth it.

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