Millennials renting in this country will have spent more than £110,000 in rent by the time they are finally in a position to buy a property, according to fresh research.
Those renting an average-sized home in the capital having started their tenancies at age 21 will have spent £110,830 by the time they buy their first home at age 32, which equates to 34% of their £330,234 household post-tax income, according to Landbay’s National Rental Survey.
Those living in London will unsurprisingly pay significantly more money in rent, with the study suggesting that the average household will have spent £273,210 on rent by the time they take their first step on the property ladder, reflecting the fact that house prices and rents are generally higher in the capital.
But the findings from the report also reveal that 41% of millennials do not expect to ever own a home of their own, relying instead on the private rental sector to support them into old age.
These tenants, it is estimated, will spend £1.1m on rent if they live outside of London, and a staggering £2.6m on lifetime rent if they live in the capital by the time they reach the average life expectancy of 82.
John Goodall, CEO and founder of Landbay, commented: “While younger people have always been overrepresented in the private rented sector, over the last decade there has been a marked increase in the proportion of younger households relying on the buy-to-let market.
“The government is giving off strong signals that it is ready to tackle the supply shortages gripping the nation, while also improving standards, affordability and the institutional supply of rental properties in particular.
“This can only be good news if it becomes reality, but with so many of the issues being systemic, only time will tell if these measures will have the desired effect.”
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What may surprise the majority of tenants is that none of these rental payments count towards their credit score. We at CreditLadder are working with landlords to enable them in facilitating rental payment reporting for their tenants to Experian's Rental Exchange. Tenants are encouraged to pay on time, resulting in lower arrears and the service is free to landlords. If you would like to introduce this service to your tenants please do contact me. My email is asa@creditladder.co.uk.
I was born in 1967. I spent nearly 20 years renting before I bought my first property. And I worked out i spend around £75k on rent in that period. Allowing for inflation I don't think the millennials are paying much more than i did back then.
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