FEBRUARY 12, 2018 | BY A & S Property
Total amount millennials pay in rent starts to fall as more become homeowners
Tenants collectively paid a whopping £51.6bn in rent last year, which is £1.8bn higher than the previous year and more than twice what they paid in 2007, new figures show.
The hike in rent paid was fuelled primarily by both increasing rents and a rise in the number of households renting. The total amount of rent paid by tenants has increased annually for the last decade as the number of people renting has grown.
However, the amount of rent paid by millennials (born 1977-1995) has dropped by 2% as generation Z - those born after 1995 - picks up the baton, according to the research by Countrywide.
Generation Z now collectively spend £5.5bn in rent, doubling over the last year, but this amount was matched by baby boomers (born 1946-1964), which also remain important to the rental market.
Proportion of total rent paid by each generation
Total rent paid by each generation (billion)
The rate of rental growth in January remained unchanged from the end of 2017.
But on an annual basis, the average cost of a new let rose 2.4% from last year, unchanged from December 2017.
Excluding London, average rents across Great Britain rose 1.9%, compared to annual growth of 2% in December.
Rental growth has accelerated in the capital while Scotland, the South East and the South West saw growth rates slow. The North East was the only region to see rents fall.
Johnny Morris, Research Director at Countrywide, said: “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.
“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.”
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