Three years later the issue is receiving growing attention in the UK as well. A study conducted by Prudential showed that there are currently 82,500 so-called ‘3G' households in the UK. This number is expected to increase as the credit crunch deepens, making it increasingly difficult for young people to acquire mortgages and purchase their own home.



The study revealed that three in four parents were worried that their children would not be able to afford property and would live with them past the age of 21. Financial trends over the past few months show that these parents' concerns are not groundless. The numbers indicate that, more and more, banks are reducing mortgage offers. They are also withdrawing offers made to candidates who were previously considered eligible for a mortgage.

A few years ago property was too expensive for many young adults to get on the property ladder. Now, with housing prices at historic lows, young adults are finding that they are still being denied the chance to own a home.

But the crunch may be affecting the elderly as well. A large and growing number of retired parents are also moving in with their children. The study found that 10% of adults had elderly relatives over 60 living with them. This, according to Prudential's findings, is because many failed to prepare properly for retirement and had to sell their homes to live through retirement. There are, however, other possible reasons for this development.

A large number of retirees prefer to sell their family home and purchase a smaller property after retirement. Large family homes may not fit a retiree's lifestyle or circumstances and can be very costly to maintain, especially on a pension. Smaller homes means retired individuals would be able to save more money on general maintenance, taxes and utilities. Downsizing their property after retirement also allows retirees to use part of the equity from selling the larger home to fund their retirement.

With housing prices falling and potential buyers unable to acquire a mortgage, retirees may be feeling the brunt of the credit crisis as well. Many depend on loans to cover the initial costs of repairing and updating their home and preparing it for sale. With the value of credit increasing and the price of their property decreasing, it may be even more difficult for retired individuals or couples to feel financially secure and independent after retirement.

3G homes may very well be the best option for many families during the present financial situation. Sharing the costs as well as the benefits of intergenerational living may help families to ride safely through the recession. Gary Shaughnessy, the managing director of Prudential argues that, “For the middle generation the financial drain of providing support for both the younger and older generations could have a detrimental impact on their ability to save adequately for their own retirement”. He may very well be right. But the important question is, what alternatives are available for these families?