When and where offspring disperse has important implications for the evolutionary emergence and maintenance of group living. In noncooperative breeders, direct benefits of delayed dispersal are relatively limited, suggesting that decisions regarding whether or not to remain in the parental territory are largely driven by the availability of suitable habitat in which to settle. Although there is ample evidence of correlations between habitat saturation and delayed dispersal, experimental tests are rare, particularly for species with facultative group formation. We manipulated the density of conspecifics in enclosed populations of a family living reptile to experimentally evaluate the influence of habitat saturation on the tendency to delay dispersal. Habitat saturation did not influence whether or not offspring explored their surroundings. However, when conspecific density was high, more offspring delayed dispersal and those that did settle in high-density enclosures had reduced survival. These patterns appear to be due to increased dispersal costs imposed by conspecific aggression; offspring that explored high-density enclosures had reduced body condition and a greater risk of mortality. We discuss these results in the context of the evolutionary origins of family living.