New research by lettings agency Hamptons shows the total amount of rent paid by tenants across Britain has actually fallen eight per cent from its peak of £62.4 billion in 2018 down to £57.3 billion this year.
It adds that this fall takes the amount of rent paid by tenants back below 2015 levels.
Despite record rental growth, the drop has been driven by a combination of fewer renters and successive generations choosing to spend different amounts on rent.
Fewer Millennials (those born between 1980 and 1996) renting has sparked the fall in the total amount of rent paid nationally.
The Millennial rent bill has fallen at an increasingly fast pace over the last three years, dropping 28 per cent from a peak of £33.3 billion in 2017 down to £24.0 billion this year.
This demographic group currently accounts for 42 per cent of all rent paid in Great Britain, down from a peak of 55 per cent in 2016.
Aneisha Beveridge, Head of Research at Hamptons, says: “Leaving home in the middle of a financial crisis, like most Millennials did over a decade ago, made buying a home difficult. Collectively, Millennials are likely to have paid more in rent than any other generation.
“But as the oldest Millennials turn 40, their rental bill is now dropping sharply as they become less likely to be a tenant and more likely to own their home. We expect Millennial’s collective rental bill to continue dropping sharply for the next couple of years before flattening out as those who want, or are able to buy, have already done so.
“With fewer Millennials renting, the overall amount of rent being paid is falling too. In previous years when the number of renters was growing, this figure would have been pushed back up by the next generation flying the nest. But Generation Z’s bill is growing more slowly than Millennials’ ever did when they left home.
“While Covid is likely to have prevented many would-be first-time renters moving out of their parents’ home, mortgages for those with small deposits are far more widely available than they were in the five years after 2007. This has meant that more Generation Z’s are likely to jump the renting stage and become homeowners, as opposed to Millennials who have had to rent for much longer.”
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