Millennials face paying £44,000 more on rent typically by the time they turn 30 than the baby boomer generation, analysis from a think-tank has found.
The Resolution Foundation said a combination of falling home ownership levels among the younger generation and rising costs in the private rented sector have fuelled the increase.
The young generation of under-35s also face paying around £25,000 more on rent by the time they hit 30 than the generation immediately above them – generation X.
The think-tank blamed the rise on a combination of falling home ownership levels among younger people and rising costs in the private rented sector
Around 60% of the generation X cohort of 35 to 50-year-olds had climbed onto the property ladder by the time they reached 30, whereas around 42% of millennials manage to become home owners by the age of 30.
The report said that close to two-thirds (63%) of baby boomers – those aged over 50 and up to 70 years old – owned their home by the time they were 30.
It said: “Decades of falling housebuilding and rising house prices have reduced home ownership for subsequent generations.”
The Foundation looked at Office for National Statistics (ONS) data as well as figures from Halifax to make the findings. The calculations were made in today’s prices and the figures used cover the UK.
It said the extra money spent on renting has reduced young people’s living standards and made it harder to save to buy a home of their own.
The £44,000 extra typically spent on rent by millennials eclipses the £33,000 average deposit that a first-time buyer needs to get on the property ladder today, the report found.
Laura Gardiner, a senior policy analyst at the Resolution Foundation, said: “The nation’s housing crisis is perhaps the most visible example of growing inequality between generations.
“Young people today are paying a heavy price for decades of falling home ownership. The struggle to get on the housing ladder has left many of today’s millennials renting, at a time when it has become more expensive to do so. Millennials have had to spend £44,000 more on rent by the time they reach 30 compared to the baby boomers.
“Britain’s continuing failure to build enough homes means that unless we change course the struggle of young people to own their home is only going to get worse.”
The findings were made ahead of the launch of the Foundation’s Intergenerational Commission on Monday.
This will carry out an 18-month investigation, probing the extent to which young people’s living standards have been “permanently scarred”. The Commission will recommend policies to raise living standards for future generations.
A Department for Communities and Local Government (DCLG) spokesman said, on average, more than 140 people a day have been helped into home ownership through Government-backed schemes since 2010.
He said the Government is also committed to creating a bigger, better private rented sector, adding: “That’s why we’ve set out the most ambitious vision for housing in a generation, including £3.5 billion in Government-backed guarantees to attract more institutional investment into the sector.”
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