According to a survey by QuMind of 1,000 people, the average total monthly income spent on mortgage and rent by young millennials, defined as 25 to 34-year-olds, was 44 per cent.
Over half of young millennials report their rent or mortgage payments have increased in the past year.
A third said that their payments had gone up by around 30 per cent or more and over half expect costs to rise further over this year or next.
This has had a negative impact on disposable income and savings, with around three quarters reporting having less disposable income and no savings by the end of the month.
No plans to cut spending
However, young millennials in the main are not planning to cut back on spending, with 55 per cent planning to increase spending on travel and holidays, 54 per cent upping spending on dining out and takeaways, 48 per cent increasing TV streaming services and 48 per cent growing spending on fashion.
The report said that this could reflect heightened optimism by young millennials on the economic climate. Compared to the national average of 29 per cent feeling optimistic in the government’s response to recession, 51 per cent of young millennials are more upbeat.
Mark Ursell, CEO of QuMind, said: “It’s undoubtedly a tough financial environment to be a young person. And they’ve shouldered a double hit – not only are they facing the greatest increase in mortgage and rent costs of any age group, but it represents the highest proportion of their total income too.”
“Despite the difficult financial environment, it is encouraging to see optimism growing and spending set to increase. However, retailers and hospitality sectors will be holding onto the hope that this isn’t just a summer boost with the (relatively) good weather and holidays.”
He added: “To ensure that young millennials continue to see their lifestyle as a valuable investment, they will need to gain a clear understanding of what these consumers actually want to spend their hard-earned cash on and respond with offerings that truly reflect their wants and needs.”
