This fall takes the amount of rent paid by tenants back below 2015 levels, according to the research, undertaken by Hamptons, part of Countrywide.
The drop in the total amount of rent paid by tenants since 2018 has been driven by a combination of fewer renters and successive generations choosing to spend different amounts on rent.
Hamptons says that fewer Millennials (those born between 1980-1996) 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% from a peak of £33.3bn in 2017 down to £24bn this year. Millennials currently account for 42% of all rent paid in Great Britain, down from a peak of 55% in 2016.
If current trends continue, Millennials could be paying the same amount of rent as Generation Z (those born between 1997-2012) within five years.
An average of 16 years younger than their Millennial counterparts, Generation Z’s bid to fly the nest has gathered pace, the study found.
Their total rent bill doubled from £1.8bn to £3.6bn between 2020 and 2021. This figure is likely to double again next year.
However, the total amount of rent they pay is increasing at a slower rate than the Millennial rent bill ever did. Covid-19 is likely to have worsened this, with more would-be first-time renters staying at home with parents during the pandemic.
Among older generations however, Generation X’s (those born between 1965-1980) rental bill has remained significantly higher than Baby Boomers. This is partly a product of them renting more expensive homes than any other generation. But with the average member of Generation X turning 50 this year, those who have not already bought are becoming increasingly less likely to do so.
Aneisha Beveridge, head of Research at Hamptons, said: “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.”
Rent paid by tenants in Great Britain
|Generation||Total rent paid in 2021||Annual change in rent paid||Share of rent paid|
|Silent (1928-1945)||£0.7 bn||-22%||1%|
|Boomer (1946-1964)||£9.0 bn||3%||16%|
|Generation X (1965-1979)||£20.1 bn||-3%||35%|
|Millennial (1980-1996)||£24.0 bn||-17%||42%|
|Generation Z (1997-2012)||£3.6 bn||102%||6%|