According to think tank Resolution Foundation, many ‘Millennials’ will have spent over £50K on rent by the time they’re 30. Millennials, or Generation Y, as they are often referred to, is the generation born in the early 1980s right up to the early 2000s, and, because of the housing crisis they have grown up with, are much more likely to be renting than buying.
This compares starkly with the £9K spent on rent by ‘baby boomers’ who are now aged between 50 and 70. This illustrates dramatically how much renting has now become the norm. Ironically, the £50K that is being spent is around £33K more than the average deposit a first-time buyer is having to find for their first property.
A mix of rising house prices and lack of house building are behind these figures but there is also no doubting that there has also been a change in mind-set in relation to home ownership amongst younger people who prefer the flexibility that renting brings. Young professionals, in particular, are opting for renting because it gives them the standard of property they want, in the location they want to be in, without having to be tied down by a mortgage.
Interestingly, around 63% of baby boomers will have owned their own home by the time they’re 30 and this compares to only 42% of Millennials. For investors, this further illustrates that there has never been a better time to invest in property, secure in the knowledge that there is a huge target audience out there eager to rent.