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Third of millennials are resigned to renting forever

A lack of affordable housing means more young people than ever will be renting as they retire (Christopher Furlong/Getty Images)

One in three young people are resigned to renting for the rest of their lives.

Such is the lack of affordable houses, millions of millennials will be living in rented accommodation into retirement.

The Resolution Foundation thinktank says 40% of that generation – those born between 1980 and 1996 – were living in rented housing by the age of 30.

That was twice as many as “generation X” – those born between 1965 and 1980.

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A record 1.8 million families with children now rent privately, according to the research, up from 600,000 15 years ago.

Lindsay Judge, senior policy analyst at the Resolution Foundation, said: “Britain’s housing problems have developed into a full-blown crisis and young people are bearing the brunt – paying a record share of their income on housing in return for living in smaller, rented accommodation.

“While there have been some steps recently to support housebuilding and first-time buyers, up to a third of millennials still face the prospect of renting from cradle to grave.

“If we want to tackle Britain’s housing crisis we have to improve conditions for the millions of families living in private rented accommodation. That means raising standards and reducing the risks associating with renting through tenancy reform.”

Young people are struggling to get enough money together to set up home on their own (Yui Mok/PA Wire)

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Today’s younger generations face a perfect storm of headwinds when it comes to trying to buy their own home.

There is a chronic lack of affordable housing, prices remain very high putting – meaning trying to get a deposit together is very challenging.

Meanwhile, meeting mortgage criteria is tougher than ever and interest rates are beginning to creep up.

The Resolution Foundation also pointed to the additional costs the government may well face in future years with more retirees renting privately.

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Last year, 1.3 million pensioners claimed housing benefit, amounting to £6.3 billion.

With more people than ever predicted to be renting after they finish work, that bill is likely to rise to £16bn by 2060.

It calls for a reform of the tax system to discourage second home ownership – the buy-to-let sector – reducing stamp duty for people who own one home and increasing surcharges for second home owners.

The government has pledged to build more affordable homes and has also axed stamp duty for first time buyers on homes up to £300,000.

It also says schemes such as Help to Buy have been a big help to younger buyers.