Parents returning rent as deposit savings help over half of adult children buy

More than half of parents who charge their adult children rent are quietly putting that money aside to hand back as a deposit, according to a survey by Nationwide Building Society. The practice of parents returning rent as deposit savings is reshaping how many young people in the UK are getting onto the property ladder.

The survey, carried out by Censuswide in July and August among more than 2,000 parents across the UK with adult children living at home and paying rent, found that parents charge an average of £303 per month, which works out at more than £3,630 a year. Of those parents, 54% return some or all of that rent to support their child’s homeownership ambitions.

How parents returning rent as deposit support works in practice

The arrangement is more flexible than it might first appear. More than two-fifths (45%) of parents said they had waived rent payments for their child at least once in the past year. More than half (52%) said they had let their child off rent payments between two and six times in the same period. In other words, the family home is functioning less like a landlord-tenant setup and more like an informal savings scheme with room for give and take.

Carlo Pileggi, Nationwide’s head of mortgage products, 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.’ He added that the 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.’

Pileggi also sounded a cautionary note: ‘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.’

The wider picture on deposit saving and affordability

The Nationwide survey sits alongside a broader pattern of family financial support. According to Yahoo Finance, in 2024-25 over a third of first-time buyers were estimated to have had some help raising a deposit, whether through a gift or loan from family or friends, or through an inheritance. The parents-returning-rent-as-deposit approach documented by Nationwide represents one more variation on that theme.

Affordability pressures make the stakes clear. Nationwide has identified Inverclyde in Scotland as the most affordable place for people getting onto the property ladder, with the average first-time buyer home costing 2.3 times local earnings. At the other extreme, the London borough of Kensington and Chelsea was found to be the least affordable location in Britain, with a home typically costing 13.9 times local earnings, according to Yahoo Finance. That gap goes a long way towards explaining why London also records the highest average rent charged by parents to adult children, at £414.97 per month, compared with £187.08 at the lower end in Yorkshire and the Humber.

Aneisha Beveridge, research director at Connells Group, said rising rents and cost-of-living pressures mean that setting aside enough money for a deposit ‘has become increasingly challenging’, with rent now absorbing ‘a large share of many young adults’ incomes, leaving little room to build meaningful savings.’ Beveridge described staying at home for longer as having become ‘less of a lifestyle choice and more of a practical stepping stone onto the housing ladder.’

Potential tensions and practical tips

The arrangements are not always smooth. Half of parents surveyed said financial arrangements with their adult child had led to tension or disagreements. Ian Harris, president of NAEA (National Association of Estate Agents) Propertymark, said that ‘even informal family arrangements can become complicated’ and recommended being ‘clear about rent, bills, responsibilities and what happens when circumstances change’ to avoid misunderstandings.

On the financial side, Katie Horne, banks relationship manager at Flagstone, pointed out that placing the returned rent into a high-interest savings account can increase its value and ‘help your child to appreciate the power of compounding interest, even over what might be a relatively short period of time.’ For families considering this route, where the saved money is held, and how, can make a meaningful difference to the final deposit amount.