While the luxury housing bubble has burst in the UK, one-bedroom rentals that are popular among millennials are still putting a dent in their discretionary cash flow.
A new study by Countrywide Plc, the UK's largest realtor, reports that a one-bedroom apartment in London now consumes 57% of a millennials net income on average, up 16% from 2007 which saw rent consume 41% of income.
The average cost of a small home in London now stands at $1,609 a month, up 48% in the past nine years, and well surpassing wage growth of 11% over the same period Bloomberg reports.
In Great Britain overall, one-bedroom apartment rents are taking up over 45% of income for millennials, up from 2007 levels as well.
With the price to own completely unaffordable due to the influx of foreign investors and cheap money, many individuals and especially millennials, have turned to renting, pushing rent higher as a result. It seems as though those millennials who expect to make hundreds of thousands after graduating school better track those jobs down quickly, lest they want to end up like many of their counterparts in the US who increasingly live with their parents.