The rental bill for 41 to 25-year-olds has fallen from a peak of £33.3 billion in 2017 to £24 billion projected across this year, Hamptons said.
The total bill paid by millennials privately renting across Britain has shrunk by more than £9 billion in the past four years, according to estimates.
Fewer millennials (those born between 1980 and 1996) now renting compared with previous years has sparked the fall, according to estate and letting agent Hamptons, which made the calculations.
As some millennials are now in their 40s with families and homes of their own, their total rent bill has fallen by 28% from a peak of £33.3 billion in 2017 down to £24 billion projected across this year.
Millennials currently account for 42% of rent paid across Britain, down from a peak of 55% in 2016, it added.
If current trends continue, millennials could be paying the same amount of rent as Generation Z (those born between 1997 and 2012) within five years, Hamptons predicts.
Those in the Gen-Z age group are estimated to be paying £3.6 billion-worth of rent collectively this year – double the £1.8 billion they paid in 2020 – as this age group’s bid to leave the homes they grew up in gathers pace.
However, the coronavirus pandemic has hampered many young adults’ ability to move out of family homes as many have been staying with parents.
Aneisha Beveridge, head of research at Hamptons, said: “Leaving home in the middle of a financial crisis, like most millennials did over a decade ago, made buying a home difficult.
“Collectively, millennials are likely to have paid more in rent than any other generation.
“But as the oldest millennials turn 40, their rental bill is now dropping sharply as they become less likely to be a tenant and more likely to own their home.
“We expect millennials’ collective rental bill to continue dropping sharply for the next couple of years before flattening out as those who want, or are able to buy, have already done so.”
She continued: “With fewer millennials renting, the overall amount of rent being paid is falling too.
“In previous years when the number of renters was growing, this figure would have been pushed back up by the next generation flying the nest. But Generation Z’s bill is growing more slowly than millennials’ ever did when they left home.
“While Covid is likely to have prevented many would-be first-time renters moving out of their parents’ home, mortgages for those with small deposits are far more widely available than they were in the five years after 2007.
“This has meant that more Generation Zs are likely to jump the renting stage and become homeowners, as opposed to millennials who have had to rent for much longer.”