Tenants’ struggles to pay bills including their rent has forced 22% of 18-24 year olds and 11% of 25-40 year olds to move back in with their parents during the pandemic, while another 16% are considering a similar move in future.
Research by flat-share site SpareRoom shows that rent payments were a big reason why 27% of those aged 18-40 were forced to borrow money in the last year – often from mum and dad – as a direct result of Covid. These loans were mainly for bills (43%), food (39%) and rent (32%).
The findings in SpareRoom’s new report, ‘The state of Gen Z and millennials’ individual economies’, go some way to explaining the collapse in rental demand in London, which Zoopla reports was down 10% year-on-year in January.
SpareRoom reveals that 43% of 18–24 year olds and 30% of 25-40 year olds are currently unemployed or have seen their income reduced. For many, Covid has also delayed personal and financial goals, such as buying a home (15%).
On average, those in Generation Z have had to borrow £1,479, while millennials have needed even more to get by, with an average loan of £1,836.
As the financial fall-out continues, 10% of these 18–40 year olds aren’t planning to repay their debts for at least four years, while some of them admit they have no intention of ever paying back their lenders.
Director Matt Hutchinson (pictured) says much has been made of the historic amount of government borrowing and how long it will take to get the economy back to pre-pandemic levels but less has been said about the impact on individuals and what the financial hangover for the younger generations will feel like.
He adds: “Thankfully we’re starting to see light at the end of the tunnel in terms of how the virus itself impacts our daily lives, but the road to financial recovery will take a little longer.”