Graduates 'move back with parents'

Two thirds of new graduates are moving back in with their parents after completing their university studies, as money worries drive the boomerang generation back home, a study has found.

Some 67% of recent graduates who lived away from home during their degree course said they are in the process of moving back into the family home, with six out of 10 of them saying financial woes are their main motivation for doing so, website MyVoucherCodes found.

More than half (53%) of those who were returning home said they are likely to remain there "for the foreseeable future" and a similar proportion (56%) said they will not be expected to stump up any cash for bills.

One in 10 graduates heading back home said they had not organised any other options, although a quarter said they simply wanted to go back to their parents. Just 5% of those surveyed said they plan to live alone, by either renting or buying their own home, while a quarter plan to share a home with friends or a partner.

The range of mortgages available to people trying to buy their first home and those with deposits of 10% or less generally has shrunk back significantly over the last six months, recent research has found.

Lenders have also tightened up their borrowing criteria as the uncertain economy continues, making it even harder for those seen as "riskier" borrowers to take their first step on the property ladder amid a background of high living costs and high unemployment.

Renting a home has often been the traditional path taken by those finding their feet after graduating, but this has also become much tougher, with rents soaring as those unable to buy their own home have remained trapped in this sector.

The typical rent in England and Wales rose to a new high of £725 a month in July, driven by "fierce competition" among frustrated would-be home buyers, a recent study from lettings network LSL Property Services found.

Mark Pearson, chairman of MyVoucherCodes.co.uk, said: "With it being tough for graduates to get a job in their chosen field at the moment, it's not as though all can simply step straight into a well-paid job after university and go it alone.

"If students want to retain some sense of independence, I think getting together with friends and finding a place to rent is a good stepping stone, although this is only a good option if the bills can be covered comfortably."