Yeah, I live in India. Interest rates here are 10%+ while rental yields are 2%-4%. But that doesn't change the calculation. In most metro areas in the world (I'm sure London included) would have rental yields that are lower than the prevailing interest rates there. It so works out because the property owner factors in the long term appreciation in value of the property.
https://ftalphaville.ft.com/2016/06...-property-market-is-doomed-doomed-i-tells-ya/
As long as that is the case, you'd prefer to be renting as long as having the 'security' of housing is not something that you seek. Which brings us to the second driver. Younger generations do not seek this 'security' since they are highly mobile, do not like consistently working and don't like the anchor of fixed payments. So its not surprising that an entire generation of people prefer to just rent rather than put down big chunks of their income and stay in that one location their entire lives having to necessarily work it off. It also enables them to spend a larger chunk of their income, which is great.
As far as savings go, its to do with mindset. In India, most youngsters are forced to save by their parents. So they do end up saving.