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1m more young adults living with their parents than two decades ago

Almost a million more young adults are living with their parents today compared with the late 1990s as housing pressures have exerted a two-decade squeeze on household formation, a new Civitas paper reveals today.

The proportion of 20-to-34-year-olds in the UK living in the parental home increased by a third between 1998 and 2017 – from 2.4 million (19.48 per cent of that age group) to 3.4 million (25.91 per cent). When population growth among that age group is taken into account, that is equivalent to an increase of 900,000.

In addition, those young adults who do move out of their parents’ home are much less likely to live on their own than they were two decades ago after a collapse in single living among younger age groups, which had been an increasingly popular choice until the late 1990s.

Among 25-44 year-olds, the number of people living alone in the UK has fallen from a high of 1.8 million in 2002 to 1.3 million in 2017.

These changes, which appear to be driven by housing pressures, help explain why average household sizes – which had been falling for most of the 20th century – plateaued in the 2000s and have even started rising in some places.

This resulted from significantly lower rates of household formation than had been anticipated, leading some commentators to maintain that there is no housing shortage and therefore no need to increase housing supply above recent levels.

In fact, as Daniel Bentley of Civitas and Alex McCallum of Shelter describe in today’s publication, lower-than-expected household formation has been at least in part an outcome of housing pressures, including high prices and rents relative to incomes, and a decline in social housing.

The proportion of households that are single-person has plateaued at about 30 per cent in recent years. This is in stark contrast to most of northern and western Europe, where single living has been increasing rapidly, to more than 35 per cent of all households in France and the Netherlands and more than 40 per cent in Germany and Denmark.

Some of the divergence in single-person household formation may be attributable to lifestyle choices and also the growth in the migrant population, among whom household sizes have tended to be larger.

But the dramatic increase in the number of young adults failing to move out of their parents’ home at all is indicative of the constraints on household formation that are being imposed by housing costs vis a vis incomes.

This is especially clear when regional differences in the UK are taken into account. The growth in young adults living with their parents has been highest in London (a 41 per cent increase between 1996-8 and 2014-15) where housing costs are greatest, and smallest in the North-East (17 per cent) and Yorkshire and the Humber (14 per cent) where average housing costs are lowest.

Daniel Bentley, editorial director at the cross-party think tank Civitas, said:

‘An important consequence of the housing crisis that has gone largely unnoticed has been depressed household formation. As owner-occupation and social housing have each become more difficult to enter, hundreds of thousands of young adults have taken one look at the high rents in the private rented sector and decided to stay with their parents a bit longer instead. And those who have moved out have been much more inclined than in the 1990s to share, either with a partner or others.

‘It is essential that in forecasting future housing needs the government does not use household formation patterns during this period as a guide because they reflect to a significant extent the outcomes of a dysfunctional housing market. Building new homes in line with household growth during this period would entrench the under-supply of housing for decades to come.’

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