More than half of parents charging adult children rent are returning at least some of the money to help them save for a first home, according to research from Nationwide.

The study found that 54% of parents who receive rent from an adult child use some or all of those payments to support their child’s homeownership plans, effectively turning the family home into a savings vehicle.

Across the UK, parents surveyed by Nationwide charge their adult children an average of £303 a month, equivalent to more than £3,600 a year.

There are significant regional differences. The average rises to £415 a month in Greater London, or £4,980 a year, compared with £187 a month in Yorkshire and The Humber and £211 in the East Midlands.

HOUSING COSTS KEEP CHILDREN AT HOME

The research, based on a poll of more than 2,000 UK parents with adult children living at home and paying rent, found that 34% of adult children are remaining in the family home specifically to save towards a property purchase.

Parents also appear willing to offer flexibility when their children face competing financial pressures. Some 45% have waived a rent payment once during the past year, while 52% said they had allowed their children to miss payments between two and six times.

Rising housing costs are expected to extend the time some adult children spend at home. Nationwide found that 82% of parents believe higher housing costs make it more likely their children will remain under the family roof for longer, while 40% said their child was still at home because they could not afford to move out.

PARENTS TAKE ON LANDLORD ROLE

The financial relationship is becoming more formal in some households. Nearly half of parents surveyed, at 45%, said they felt like a landlord to their adult child, while 61% have increased the rent they charge.

Rent increases were most common among parents in Greater London, where 75% said they had raised the amount charged. This compared with 46% in Yorkshire and The Humber.

Nationwide found that 21% of parents already have a formal arrangement with their adult child and a further 14% would consider putting one in place. In Greater London, 47% reported having a formal agreement, compared with 27% in the East of England, 6% in the East Midlands and 5% in Yorkshire and The Humber.

Such arrangements can create friction. Half of parents said financial arrangements with their adult children had caused tension or disagreements. The figure reached 70% in Greater London but was 27% in Yorkshire and The Humber.

Carlo Pileggi, head of mortgage products at Nationwide, said: “Behind many first-time buyer success stories are parents quietly helping along the way and it appears they are using new tactics to support their children.

“As saving for a home remains as challenging as ever, our research shows many of Britain’s parents are using rent payments as a way to help their children build a deposit, turning the family home and time spent living at home into a stepping stone towards homeownership.

“However, the findings also serve as a reminder that many aspiring first-time buyers do not have access to family support and continue to face significant challenges in saving for a deposit.

“At Nationwide, we’re committed to putting first-time buyers first. Whether through family help, practical guidance or mortgage products, such as our Helping Hand mortgage boost, we want to help more people take the next step towards owning a home of their own.”

Nationwide offers low-deposit mortgages for first-time buyers as well as its Helping Hand proposition, which can allow eligible borrowers to borrow up to six times income. It also offers £500 cashback to first-time buyers.

Ian Harris, president of NAEA Propertymark (National Association of Estate Agents), added: “Parents are increasingly finding themselves wearing two hats: supporting their children while also taking on many of the responsibilities of being a landlord. With almost half saying they feel like a landlord to their own child, rising housing costs are clearly changing the dynamics of some family homes.

“Where an adult child is paying rent, even informal family arrangements can become complicated. Being clear about rent, bills, responsibilities and what happens when circumstances change can help avoid misunderstandings and financial tensions. With half of parents saying these arrangements have caused disagreements, a clear agreement can be valuable even within families.

“From an estate agency perspective, the impact of this affordability pressure is ultimately visible when people are ready to make their first move onto the housing ladder. Buyers are often having to plan for longer, save more and consider different routes to getting a deposit together, while family support can make the difference between being able to proceed and having to wait.

“The rise of the ‘Mumlord and Dadlord’ therefore reflects more than a change in family life. It highlights how the journey from living at home to becoming a first-time buyer is taking longer and becoming more financially complex for some people.”