0:01 AM, 20th January 2025, About 7 hours ago
Text Size
The amount of rent paid by under 45s in Great Britain soared to a record £56.2 billion in 2024, a £3.5 billion increase from the previous year, research reveals.
Hamptons says that this surge coincides with a big rise in the number of young people renting, driven largely by higher interest rates that have made homeownership more challenging.
The agency found that the under 45s now shoulder two-thirds (66%) of the total rent being paid, an increase from 64% in 2023.
This figure mirrors pre-Covid levels, indicating a reversal of the trend seen in recent years.
Aneisha Beveridge, the head of research at Hamptons, said: “Higher mortgage rates have clipped the wings of many young aspiring homeowners in the last couple of years, meaning Millennials increasingly outnumber older generations in the rental market.
“Renters face saving for longer and earning more to borrow similar amounts of money to buy a home.
“Just like rapidly rising house prices, higher interest rates will keep younger generations of tenants renting for longer.”
The number of under 45s renting privately increased by 149,000 over the past year, reaching 3.4 million.
This rapid growth is equivalent to around 40% of the individuals who utilised the Help to Buy scheme since its inception in 2013.
While the overall annual rent paid by all tenants reached a record £85.4 billion, the increase was more modest compared to previous years.
This reflects a slowdown in rental growth and a limited rise in the number of tenants.
Nationally, the cost of moving into a rented property increased by only 2.0% over the past 12 months, the smallest increase since October 2020.
However, Hamptons warns that the recovery in the number of available rental homes appears to have stalled, which could put pressure on rental growth in 2025.
Ms Beveridge said: “For most of the last decade, the government’s flagship Help to Buy scheme played an important role in transferring tenants from the rental market into homeownership.
“However, the record rise in the number of younger renters over the last year highlights the impact of higher mortgage rates and the need for a similar scheme if the government wants to achieve its ambition to help more people become homeowners.
“The pace of rental growth continues to cool, and rents are now rising at a similar rate to house prices.
“And just like house prices, the bulk of the growth is coming in Northern England. ”
She adds: “But the recovery in stock levels looks to have peaked, keeping rental growth positive.
“While new purchases by landlords held up in December, early signs in January suggest the new 5% stamp duty surcharge is starting to bite, which could fuel more rental growth in the coming months.”
