Billions saved by renters living rent free with parents
New research reveals first-time buyers in the UK saved an estimated £7.6 billion by living rent free with their parents before purchasing homes in 2025, highlighting a significant informal support system amid affordability challenges.
According to Savills, 254,000 first-time buyers lived at home rent free for an average of three years and seven months, with the value of this support calculated at £160 per week per room. The research found that 63% of first-time buyers benefited from this arrangement, rising to 71% in London where housing costs are highest. More than a quarter of these buyers stayed at home rent free for five years or more.
This substantial contribution from families, often referred to as the ‘Hotel of Mum and Dad’, plays a critical role in enabling younger people to save for deposits in a market where high rents and living costs make homeownership difficult. Savills’ head of residential research, Lucian Cook, emphasised the importance of reduced housing costs as a form of family support alongside direct financial gifts.
Research findings on rent-free living and homeownership
Savills’ study quantifies the scale and duration of rent-free living among first-time buyers in the UK. The average period of living at home without paying rent was three years and seven months, with a significant minority extending this to five years or more. The weekly value of a room was estimated at £160, reflecting typical rental costs avoided by those staying with parents.
In London, where affordability pressures are most acute, the reliance on rent-free living was even higher, with 71% of first-time buyers benefiting from this support compared to 63% nationally. This suggests that in high-cost areas, family support through accommodation is a crucial factor in the path to homeownership.
The research highlights how living rent free reduces one of the largest expenses faced by young people, allowing them to accumulate savings for a deposit while managing other living costs. This informal support is an important counterbalance to rising rents and the broader cost-of-living pressures affecting the private rented sector.
Context of affordability and rental market pressures
The findings come at a time when the UK rental market continues to face challenges including rising rents, tighter lending criteria, and regulatory changes such as the Renters’ Rights Act. These factors have contributed to a squeeze on disposable income for many renters, making it harder to save for homeownership.
For landlords and letting agents, this trend underscores the ongoing affordability issues within the private rented sector. While some tenants remain in the market, a significant proportion of younger people are unable to enter it or are delaying renting independently due to cost pressures. This dynamic can affect demand patterns and tenant turnover.
The reliance on rent-free family accommodation also points to potential shifts in rental market demographics, with implications for how landlords and agents approach tenant engagement, lease terms, and support services. Understanding these broader social and economic factors is essential for those managing rental portfolios.
Practical implications for landlords and letting agents
Landlords should be aware that a sizable segment of potential tenants may be delaying entering the rental market, impacting demand and rental income stability. This could influence decisions on rent setting, marketing strategies, and tenant retention efforts.
Letting agents might find value in advising landlords on these trends, helping them anticipate changes in tenant profiles and preferences. For example, younger tenants entering the market later may have different affordability thresholds or longer-term rental intentions.
Additionally, the extended period some first-time buyers live rent free with family suggests that landlords may see a more gradual turnover of tenants in certain areas, affecting portfolio management and cash flow planning. Agents and landlords should monitor local market conditions closely and adapt their approaches accordingly.
Uncertainties and areas to watch
While the research provides valuable insights, it does not address how these patterns might evolve with changes in government policy, economic conditions, or housing supply. Future shifts in interest rates, rental regulations, or housing affordability could alter the balance between renting independently and living with family.
There is also uncertainty about how long this rent-free support can continue as demographic and economic pressures on families themselves increase. Landlords and agents should remain alert to potential changes in demand and tenant behaviour stemming from these broader social trends.
Monitoring official guidance and market data will be important to understand ongoing impacts on the private rented sector and to prepare for any regulatory or market shifts that may affect tenancy arrangements or rental income.
Considerations for landlords going forward
- Review tenant demand and turnover trends in your area, especially among younger renters who may be staying longer with family.
- Assess rent levels carefully in light of affordability pressures and potential shifts in tenant profiles.
- Stay informed about government housing policies and rental market regulations that could influence tenant behaviour and supply.
- Maintain clear records of tenant communications and tenancy agreements to manage any changes effectively.
- Consider how evolving social trends might impact your portfolio’s performance and plan accordingly.
Supporting landlords with compliance and portfolio management
Membership of The Landlord Association (TLA) offers landlords and letting agents access to practical compliance resources and guidance relevant to managing rental properties amid changing market conditions. TLA’s developing ORBIT platform, currently available in BETA testing, aims to assist members in organising properties and portfolios, managing rental documents, and recording key actions such as inspections and communications.
ORBIT’s tools can help landlords keep essential tenancy and compliance information together, supporting effective property management in a complex regulatory environment. Exploring TLA membership provides access to these resources and ongoing updates on regulatory developments affecting the private rented sector.
Looking ahead, landlords should continue to monitor market dynamics and regulatory changes closely. The role of informal family support in housing affordability remains significant, but shifts in economic conditions or policy could influence rental demand and tenant behaviour in the coming years.
Sources: Landlord Today
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