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.”
Comments (3)
It is hard for our myopic and forgetful politicians to recall the “golden age” of the 1970’s housing market.
Rent control, mortgage rationing (bet you all forgot that one), lack of PRS Private Rented Sector and saving with the building society on a regular basis for over a year, just to get an appointment to discuss a mortgage.
We lived with family for 18 months.
Then a council house, for 2 years.
Next we bought our own home, not an ex-council house, as they did not yet exist.
The process took nearly 4 years.
Sadly the millennials, expect thing to happen in an instant. No hard grind to save for a deposit. They do not want to live without “essentials” to achieve an objective.
The problem is still the same. Just the numbers are all bigger.
More nonsense. In the era of the baby boomers renting was almost impossible due to the Rent Act and rents artificially controlled at such a low level that landlords could not maintain their property. The standards of maintenance was low and there was a grant system in place to install basic facilities such as inside toilets, bathrooms and heating systems. The system was as broken then as it is now. Now it is due to inadequate supply due to unprecedented influx of population growth partially due to migration. Baby boomers had no choice they could not rent and were forced to live with parents until they could get their deposit together to buy their home. It was almost impossible for a single person to buy their own accommodation. Even then mortgages were not freely available to all and sundry and you had to save with a lender for some time to stand a chance of getting a mortgage. There was no mobility of labour and most had to find work close to where they lived or “lodge” with people prepared to rent out a room. It has always been tough to get on the property ladder. These factor alone make it impossible to make the above comparisons. The fact there are so many buy to let landlords perhaps demonstrates the fact there that successive governments have failed to maintain a reasonable level of social mobility and the rich had got excessively rich (bankers city traders etc) and the poor poorer often fueled by migration and cheap labour such as that used for fruit picking. Then you had council houses being available and being built; now you have “Generation Asset Strip” with Government saying they are going to build “x” hundreds of thousands of homes; which of course they don’t as they expect developers to provide them by taxation. The Government do not seem to accept that once the assets are gone they are gone forever! Even our energy has been sold to foreign countries like France! Once sold you loose control and some things should never have been sold to the private sector such as telecoms, utilities etc. Whilst MP’s target things like letting agent fees (an open market) yet on the other hand say we should all switch our utility suppliers every year (where they brought in privatization) as utility companies rip off their customers. Here endeth today’s sermon!!!
Please use paragraph breaks if you want me to read the comments. it hurts my eyes and makes it look like you’re just ranting!