Tenants across the UK face a doubling of the amount they pay in rent this year as household budgets face the tightest squeeze in decades as prices soar.
Analysis from Hamptons shows tenants paid a total of £31bn ($36.7bn) in rent in the first six months of the year, which is expected to double to a record £63bn by the end of 2022 due to strong rental growth.
Rising rents mean the total amount of rent paid by tenants has more than doubled since the financial crash in 2008 while surpassing the 2017 peak.
That is despite there being around 275,000 fewer private tenants than there were five years ago, the lettings firm said.
Tenants paid £750m more in rent in the first half than during the same time period in 2017, and £17.3bn compared to 2008.
The rising rental bill has been driven by Gen Z (born between 1997-2012) flying the nest.
Gen Z tenants paid a record £5.8bn during in the first six months, likely to hit £11.7bn over the whole year, meaning for the first time they will pay more rent than Baby Boomers (born between 1946-1964).
"Generation Z’s rent bill is rising at a faster pace than when the previous generation, Millennials (born between 1981-1996), started to leave home during the 2008 downturn, with far fewer buying their own place," Hamptons said.
"And on their current trajectory, they [Gen Z] are likely to be paying more than Millennials within the next three years."
Average rents across the UK rose 8.8% in the last 12 months, representing a slowing of growth from the 11.5% recorded in May.
The average monthly rent now stands at £1,163, up from £1,069 at the same time in 2021.
Rents in London grew faster than anywhere else, rising 12.1% over the last 12 months for the second month in a row, taking the average monthly rent above the £2,000 mark for the first time ever.
Aneisha Beveridge, head of research at Hamptons, said: "Rapid rental growth will see tenants handing over a record £63bn in rent during 2022, the first big jump for five years.
"Almost all the rise stems from record-breaking rents which have been driven by a lack of homes available to rent alongside investors passing on higher running costs to tenants. In particular, landlords have been squeezed by rising mortgage rates, alongside more expensive insurance premiums and maintenance costs.
"Generation Z are joining the rental market faster than any previous generation, mostly because fewer are likely to become young homeowners. It will take a significant uplift in homeownership rates over the next five or so years to stop Generation Z paying more in rent than Millennials, which seems unlikely as interest rates and house prices continue to rise.
“Older generations have shown that by the time a tenant hits middle age, they’re increasingly less likely to ever become a homeowner.
"For many, the deposit remains as much of a barrier to buying as it was in their twenties, while getting a mortgage becomes tougher since lenders are cautious about extending a mortgage deep into retirement age. This typically means the term gets progressively squeezed, pushing up the monthly payments and acts as a barrier to homeownership."
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