The amount of rent paid by millennials (those born between 1977-1995) has dropped by 2% over the past decade, potentially suggesting that more households stuck in generation rent are becoming homeowners, according to data from Countrywide.
Meanwhile, the amount of rent paid by generation Z (those born after 1995) has picked up over the last ten years, doubling in the past year alone, to a collective £5.5 billion in 2017. This matches baby boomers (born between 1946-1964), which also remain important in the rental market.
Overall, tenants collectively paid £51.6 billion in rent last year, which is £1.8 billion higher than in the previous year and more than twice what they paid ten years ago.
The hike in rent paid was fuelled primarily by both increasing rent prices and a rise in the number of households renting. The total amount of rent paid by tenants has increased annually for the past decade, as the number of households renting has grown.
The rate of rent price growth in January remained unchanged from the end of 2017, however.
But, on an annual basis, the average cost of a new let rose by 2.4%, which is unchanged from December 2017.
Excluding London, the average rent in Great Britain increased by 1.9% in January, compared to annual growth of 2% in December.
Rent price growth has accelerated in the capital, while Scotland, the South East and South West saw growth rates slow. The North East was the only region to see rents drop.
Johnny Morris, the Research Director of Countrywide, comments on the findings: “The rental market grew in 2017. More people joined the rented sector and average rents increased, meaning 2017 saw the highest total rent bill so far.
“As millennials age, more are becoming homeowners, so the total amount they’re paying in rent has started to drop. But the generation rent title still applies. Any fall will be much smaller and slower than seen by previous generations, as less become homeowners.”
He continues: “For the second month running, rental growth in London has outstripped the rest of the country. Stabilising rents in central London, alongside rises everywhere else in the capital, has pushed the rate of rental growth to the highest level for 22 months. While the rate of growth outside London remains higher than for most of last year, it has picked up to a lesser extent. Across northern England, rent rises are running at half the rate of 2017.”
So it seems that it’s not all good news for millennials, as many will still be forced to rent from private landlords.
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