29 Sep Millennials spend three times more on housing than grandparents
The generation currently aged 18-36 are typically spending over a third of their post-tax income on rent or about 12% on mortgages, compared with 5%-10% of income spent by their grandparents in the 1960s and 1970s. Despite spending more, young people today are more likely to live in overcrowded and smaller spaces, and face longer journeys to work – commuting for the equivalent of three days a year more than their parents.
Research by the Resolution Foundation think tank has found that young people are spending three times more on housing than their grandparents did.
At the age of 30 millennials spend 23% of their annual income on housing costs, compared to those born 1926–1945 who, aged 30, spent just 7%.
The post-war baby boomers now benefit from record levels of outright ownership, but there are now as many young families (aged 25–34) living in the private rented sector as owning a home or living in the social rented sector combined (36%).
While the number of mortgage loans issued to first-time buyers over the past year is at its highest level since pre the financial crisis, the average age of a first-time buyer looks set to continue to rise over the coming years.
The quality of housing has in many respects improved hugely. But millennial-headed households are more likely than previous generations to live in overcrowded conditions, and when we look at the distribution of square meterage we see today’s under-45s have been net losers in the space stakes compared to previous cohorts, while over-45s are net gainers. More recent generations have also had longer commutes on average than previous cohorts, despite spending more on housing.
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