Tenant’s bills are expected to hit a record £63bn this year, driven by strong rental growth and younger Generation Z tenants joining the market, according to Hamptons.

This figure is a 2% rise on rents last year, and by comparison, first-time buyers spent £84bn getting their feet on the property ladder in 2021, says the estate agent’s Monthly Lettings Index for June.

Tenants across the country paid a total of £31bn during the first six months of this year, a 2% rise on the same period a year ago.

The report says: “Rising rents mean the amount of rent paid by tenants has more than doubled since 2008 and has topped the 2017 peak, despite there being around 275,000 fewer private tenants than there were five years ago.”

During the first half of 2022, tenants paid £750m more in rent than in the first half of 2017, and £17.3bn more than in the first six months of 2008,

The study highlights generational shifts in the rental market. It says as Generation Z (those born between 1997-2012) leave home, their rent bill is projected to rise ten-fold compared to three years ago, leaving them paying more than Baby Boomers (born between 1946-1964).

Generation Z tenants are forecast to pay £11.7bn in rent this year, around a fifth of the country’s total bill and a more than threefold year-on-year jump. By contrast, Baby Boomers will pay £8.9bn in 2022, a 7% fall on last year.

Meanwhile, Millennials (born between 1981-1996) paid 49% as much rent as they did in 2017 as more of them bought properties.

Millennials are still forecast to pay more rent than any other generation this year at £22.4bn, an 18% fall on last year, followed by Generation X (born between 1965 to 1980) who are projected to pay 19.6bn, a 5% decline on 2021.

The report says the overall rising rental bill is “driven” by Generation Z “flying the nest”.

It says: “Generation Z’s rent bill is rising at a faster pace than when the previous generation, Millennials, started to leave home during the 2008 downturn, with far fewer buying their own place. And on their current trajectory, they are likely to be paying more than Millennials within the next three years.”

It adds: “The Millennial rent bill has fallen by nearly half from 2017 as many renters between their mid-20s and early 40s bought their first home. Despite tumbling homeownership rates over the last two decades, it is likely that Millennials collectively will be paying less rent than their predecessors, Generation X by next year.”

Looking at rental growth across the UK market, the report says, average rents lifted by 8.8% over the last 12 months, representing a slowing of growth from the 11.5% posted in May. The average monthly national rent stands at £1,163 in June, up from £1,069 a year ago.

For the second month running, rents in London grew faster than anywhere else in the country, rising by 12.1% over the last 12 months taking the average monthly rent above £2,000 for the first time.

Inner London rents posted a record annual growth rate of 35.1% as their strong recovery from the pandemic continued at pace. Despite record growth, at a monthly average of £2,675, rents in Inner London remain 6.5% below their October 2019 peak and hover just 1.6% above where they were in January 2020.

Hamptons head of research Aneisha Beveridge says: “Rapid rental growth will see tenants handing over a record £63bn in rent during 2022, the first big jump for five years. Almost all the rise stems from record-breaking rents which have been driven by a lack of homes available to rent alongside investors passing on higher running costs to tenants.

“In particular, landlords have been squeezed by rising mortgage rates, alongside more expensive insurance premiums and maintenance costs.

“As Generation Z fly the nest, they’ve seen a tenfold rise in what they pay in rent over the last three years meaning they now hand over a fifth of all rent paid. Generation Z is joining the rental market faster than any previous generation, mostly because fewer are likely to become young homeowners.

“It will take a significant uplift in homeownership rates over the next five or so years to stop Generation Z paying more in rent than Millennials, which seems unlikely as interest rates and house prices continue to rise.

“Older generations have shown that by the time a tenant hits middle age, they’re increasingly less likely to ever become a homeowner. For many, the deposit remains as much of a barrier to buying as it was in their twenties, while getting a mortgage becomes tougher since lenders are cautious about extending a mortgage deep into retirement age.

“This typically means the term gets progressively squeezed, pushing up the monthly payments and acts as a barrier to homeownership.”