A report earlier this year from the London Assembly sets out the problems young adults face in accessing home ownership, compounded by a high cost of renting in large cities. This is a challenge common in urban markets the world over. As a result, they are living with parents for longer, resulting in a rising number of concealed households. Concealed households can have a large, often underappreciated, effect on demand for housing with knock-on effects for wider economic growth.

As discussed in our housing affordability Impacts article, some of the most adversely affected regions in terms of cost and availability of housing are found in Europe and the Anglosphere.

In the United States, young people are more likely to be living with their parents than at any point since 1960. For men between the ages of 25-34, this percentage increased from 11% in 1960 to 19% in 2022, while for women it has increased from 7% to 12%. That increase has been especially acute among women aged 18-24, which saw an increase from 35% to 55% between 1960-2022.  This reflects greater participation in higher education and later marriages, a trend mirrored across developed countries.

In the United Kingdom, the story is similar. Between 2011 and 2021 the total number of adult children living with parents rose by 14.7%. For those aged 25 years old, this number rose from 28.7% in 2011 to 37.5% in 2021.  

Within continental Europe, there is a very clear north-south divide when it comes to young adults living with their parents. In Northern European countries, those university aged tend to leave their hometowns to study, whereas in the southern European nations young adults are far more likely to live with their parents into their 30s. But in both regions the average age people leave their parents’ household is rising: in Sweden it rose from 19.9 in 2012 to 21.8 in 2023 and in Spain from 28.7 to 30.4 As a result of this trend, markets in southern Europe have some of the lowest provisions of purpose built student housing. These countries present great opportunities for increased investment and development of this type of housing; in 2023 Spain, Italy, and Portugal made our top five countries seeing the largest investment pipeline for student housing in Europe.

In high income Asian markets, such as Hong Kong, the proportion of individuals between 25-34 living with the parents rose from 56.4% to 63.7% in 2011-2021. In Asian countries, there is a strong link between these concealed households and intergenerational living, where greater cultural pressures are placed on the care of older family members. This is a key difference to other markets in Europe and the Americas, where choices are more often made along economic lines rather than culturally.

These demographic changes mean that greater emphasis must be placed on increased development of all types of residential real estate from both public and private sources in these affected areas. Student housing, especially in cities with prestigious universities, can release the pressure on open market residential stock. Co-living, promising young people a community and access to amenities, is another growth area. 

Larger, multi-generational households contribute to the slowing rate at which older generations make downsizing decisions about their property. In the UK, a recent study suggested that downsizing can unlock £305,090 for families making the move, helping make preparing for retirement easier while also releasing more housing supply for new families looking to upsize.

Moving out and starting a life on one’s own is more than a symbolic change, it is one that represents greater participation in society and the economic landscape. The challenge that both public and private sectors face is ramping up the development to meet a wide range of housing needs.

Further information

Contact Connor Chilton

IMPACTS: Tackling housing affordability through supply