The combination of falling home ownership and rising costs in the private rented sector mean that today’s millennial generation will have spent £44,000 more on rent by the time they are 30 compared with the baby boomers generation.
Analysis by the Resolution Foundation highlights an alarming drop in home ownership over recent decades that has reduced living standards for the young and led to a further concentration of wealth among the old.
The analysis shows that baby boomers – those born between 1946 and 1965 – were the main beneficiaries of the growth in home ownership over the 20th century.
Some 63% were home owners by the age of 30. Today, the proportion of millennials who are home owners by 30 is just 42%.
This shift away from home ownership has left many more millennials renting privately and has coincided with a sharp increase in the cost of renting.
The analysis finds that millennials spend almost twice as much on rent as Generation X – the generation between the baby boomers and the millenials – did at the same age.
Generation X in turn spent twice as much as the baby boomers.
The analysis finds that millennials have spent £44,000 more on rent than the baby boomers by the time they reach 30, and £25,000 more than Generation X.
The Foundation says that the extra spending on rent has reduced young people’s living standards and made it harder to save for a deposit for a house. It notes that the extra spending on rent is more than the average deposit for a first-time buyer today of £33,000.
Laura Gardiner, 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.”