Almost three quarters of rents in Britain were paid by the two youngest generations last year.
Research by estate agent Hamptons International found millennials paid 60 per cent of all rents last year, equating to £37.3 billion.
Millennials were followed by generation Z (those born after 1995), whose share of the total rent bill rose to 15 per cent – up from just one per cent in 2014. This equates to £9.2 billion.
The new research comes as the total growth in rents across Britain increased to 3.7 per cent in December last year, the strongest rate on record in any December since 2014.
According to Hamptons International, tenants in Britain spent an eye-watering record of £62.4 billion on rent last year, up £3.1 billion on the previous year.
Meanwhile, during the past decade, rising rents and increasing numbers of tenants in the rental sector has seen the country’s total rent bill increase £27.9 billion since 2009 – the equivalent of 81 per cent.
Since 2007, millennials have paid the majority of rent in Britain. But their current 60 per cent share is down from a peak of 64 per cent, recorded in 2015. Hamptons International said this is because more millennials have become homeowners.
Generation Z has picked up the baton, with these tenants likely to pay more rent than generation X (those born between 1965 to 1976) for the first time.
While the youngest two generations paid 74 per cent of all rent in Britain, older tenants still play a significant role.
Last year, so-called baby boomers (those born between 1946 and 1964) accounted for eight per cent of the total rent bill and paid £5.3 billion in rent. This was down from 10 per cent in 2018, when they paid £5.9 billion in rent.
At the same time, the oldest generation – born before 1945 – paid £0.5 billion in rent last year, £0.2 billion less than in 2018. Hamptons International said many in this age bracket tend to be homeowners rather than tenants.
Aneisha Beveridge, of Hamptons International, said: “As millennials have aged, more have become homeowners. This has meant that the total amount of rent millennials pay has fallen. Millennials paid £37.3 billion in rent last year, down from a peak of £38.2 billion in 2017.
“But it’s the youngest generation, Generation Z who are picking up the baton. They paid just 1 per cent of all rent in 2014, but as more have left home to become renters, this increased to 15 per cent of rent in 2019. This year we expect Generation Z to pay more rent than Generation X for the first time.
“Average rents grew 3.7 per cent in 2019. Rents rose in every region, but those in the South saw the biggest increases. Low stock levels have put pressure on rents, resulting in stronger rental growth during the second half of 2019.”
What do you think about these changing tenant demographics and how will they affect your rental? Let us know in the comments below.
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