Rent paid to private landlords is more than double the amount of mortgage interest paid to banks by homeowners, as the number of people living in the rental sector continues to grow.
Private tenants paid about £54 billion in rent to their landlords in the 12 months to June, according to figures published by the estate agency group Savills. Younger people contributed around £24 billion of the total.
Mortgage rates have stood at historically low levels since the banking crash of 2008/09, with the amount of interest paid by homeowners to banks and other lenders falling to £26.5 billion in the same period. Home ownership has fallen to its lowest level for a generation, while sizeable deposits are difficult for first time buyers to raise.
Lucian Cook, head of residential research at Savills, said that despite low interest rates, it has become increasing difficult for people to save for a deposit due to slow wage growth and rising house prices. “Fewer people have been able to benefit from the low mortgage rates and we know that people are renting longer into later stages of life,” said Mr Cook.