The difficulties younger people face when trying to get onto the housing ladder are well documented.
Rising house prices, and tighter mortgage lending criteria, have combined to push the average age of a first time buyer well past 30, consequently younger people are staying in the rented sector for longer.
However, the rise in older renters has, so far, been less well covered by the financial press, but new research by the National Landlords Association (NLA) has revealed some surprising results.
According to the research:
- The number of retirees living in private rented accommodation has increased by 220,000 over the last four years
- Despite the increase in demand, the number of Buy to Let landlords who let their property to a retiree has fallen by half over the same time period
- The South-East has the highest proportion of retired renters
Meanwhile, the University of York’s Centre for Housing Policy has predicted that by 2040 up to one third of over 60s will be living in rented accommodation.
Why are more retired people renting their home?
The rise in the number of retired renters is due to a number of factors, but the need to release equity from a property, to pay off debt, is often a major contributory factor. Additionally, the growing trend of divorce or separation later in life also partly explains the rise in renters, while others sold their home in an effort to boost their retirement income.
The survey will naturally lead to concerns that demand for housing in the private sector from retirees will outstrip supply, potentially causing a shortfall for younger renters.
Commenting on the research Carolyn Uphill, Chairman of the NLA said: “More and more people are turning to private rented housing at every stage of their lives, including in retirement.”
“Landlords appreciate the stability and assurances often provided by older households, but are finding it increasingly difficult to build businesses around the needs of potentially vulnerable tenants.”
“Successive cuts to the welfare budget, uncertainty about pension provisions, and the devastating impact of the Government’s tax changes are likely to mean that private landlords will soon be unable provide homes in high cost areas like Central London for anyone without a well-paying job.”
“As the proportion of retired renters continues to grow there’s a real worry that homes won’t be available in the private sector, forcing people to look further afield – leaving communities they have known and contributed to for decades.” (Source: NLA)