Millennials renting an average-sized property outside of London, who begin their tenancy at age 21, will spend an average of £110,830 in household rental payments before buying their first property at the average first-time buyer age of 32.
Those are the findings of new research by buy to let lender Landbay.
For those living in the capital, where property prices and rents are significantly higher, the average household will have spent £273,210 on rent by the time they take their first step on the property ladder.
However, as it stands today, the research suggests 41 per cent of millennials don’t expect to ever own a home of their own, relying instead on the private rental sector to support them into old age.
Lindsay says that for this emerging generation of lifetime renters, the total amount they will spend on rent in their lifetime will be an average of £1.1m if living outside of London. Again, those choosing to live in the capital will spend 2.5 times this figure; a total of £2.6m.
For the fortunate millennials that are able to buy their first house at the age of 32, they will have spent 34 per cent of their household post-tax income (£330,235) on rent (£110,830) throughout their 20s and early 30s.
Meanwhile, those renting for life, and retiring at the future state pension age of 68, will have to save for 15 years of rental payments in retirement, and will therefore spend a greater proportion, some 44 per cent, of their household disposable income (£2.4m) on rent (£1.1m) by the time they reach the average life expectancy of 82.
“While younger people have always been overrepresented in the private rented sector, over the last decade there has been a marked increase in the proportion of younger households relying on the buy to let market” says John Goodall, chief executive and founder of Landbay.
“The government is giving off strong signals that it is ready to tackle the supply shortages gripping the nation, while also improving standards, affordability and the institutional supply of rental properties in particular. This can only be good news if it becomes reality, but with so many of the issues being systemic, only time will tell if these measures will have the desired effect.”