28% of young millennials’ mortgages and rent now costs over 60% of their total income

28% of young millennials’ mortgages and rent now costs over 60% of their total income, according to latest research by QuMind.

New research from QuMind, the consumer insights platform, has found that despite the cost of mortgages and rent skyrocketing, young millennials (25- to 34-year-olds) don’t plan to make cutbacks on their lifestyle forever and expect to increase their spending over the next six months.

Over half (56%) of young millennials report their rent or mortgage payments have gone up in the past year, with 33% reporting that their payments had gone up by 30% or more. 55% are expecting these costs to rise further over this year or next.

Almost half of young millennials’ total monthly income is now spent on paying their mortgage or rent (44% on average), with 28% reporting it accounts for 60% of their salary.

Unsurprisingly, this is having a real impact on their finances, including having less disposable income (79%) and no savings (71%) by the end of the month.

Mark Ursell, CEO of QuMind, comments:

“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.”

Lifestyle makes a comeback

Despite the rising costs of housing and its impact on young millennials’ financial situation, they don’t plan to cut back on their lifestyle forever.

When asked if they anticipate their spending to change over the coming six months compared to the first half of 2023, young millennials plan to increase their spending on travel and holidays (55%), dining out and takeaways (54%), TV streaming services (48%) and fashion (48%).

The increased appetite to spend may reflect the optimism shown by young millennials towards the current economic climate. Compared with a national average of 29%, 51% are confident in the Government’s response to the recession – the highest of all age brackets.

The spending may also correspond with the overall sentiment shift revealed by the QuMind Sentiment Index, where since October 2022 the general feeling of the nation has increased from -35 to -14. So, while the overall sentiment is negative, the nation is starting to feel more positive.

The QuMind Sentiment Index is a proprietary analysis approach that takes a quarterly temperature check of how Brits are feeling about the current economic and political situation in the UK. It not only measures the sentiment, but the intensity to which respondents are feeling it. The scale runs from “-100” for high-intensity negative responses through to “+100” for high-intensity positive.

Mark continued:

“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.

“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.”

Kindly shared by QuMind