UK housing costs force 42 per cent of 25-year-olds to live with parents
Institute for Fiscal Studies data reveals that stagnant wages and unaffordable housing have trapped 42 per cent of 25-year-olds in the UK in their childhood homes, a structural shift that entrenches wealth inequality and constrains domestic economic mobility.
The proportion of 25-year-olds living with their parents in the UK has surged to 42 per cent, up from 25 per cent in the 1990s, according to analysis by the Institute for Fiscal Studies. Data shows that co-residence for adults in their 20s and 30s has grown by over a third across the same period.
This trend signals a profound shift in the British economic model that carries significant implications for labor mobility and consumer spending. Young adults lacking independent housing are less able to relocate for work or form new households, directly suppressing domestic demand and entrenching regional economic disparities.
The Institute for Fiscal Studies notes that declining housing affordability, rather than demographic changes, is the primary driver. The share of 25-year-olds who own their home has fallen from 43 per cent in the mid-1980s to 15 per cent currently, while real earnings for this age group have barely progressed beyond levels seen two decades ago. Employment for 25-year-olds has also dropped for both men and women.
The financial burden of this shift falls heavily on lower-income families, who often keep adult children at home to save on rent. Financial transfers highlight this divide: roughly 15 per cent of the wealthiest fifth of households gave or lent money to their children between 2018 and 2020, whereas less than 5 per cent of the poorest fifth did so. This dynamic reproduces inequality not just in wealth, but in the fundamental ability to establish an independent life.
The personal toll of this economic squeeze extends beyond financial metrics. One 26-year-old man who moved back in with his parents told the BBC’s Today programme: “I’m not going to bring a girl back to my parents’ house. So it would have 100% affected that part of my life, which does get me low.”
These outcomes reflect institutions that suppress wages and allow landlords to capture housing scarcity. Andy Burnham, who promised “the biggest council housebuilding programme since the postwar period” before becoming prime minister, has argued: “If you don’t give people a good home, what chance have they got of having a good life?”
While the UK rate remains below Italy and Spain, where leaving home is traditionally tied to finding a partner rather than starting work, the trajectory is notable. Britain is drifting toward a southern European experience without the family culture that typically supports it, risking a prolonged period of economic stagnation for its younger workforce.
