Thu 06 Jul 2017
Retired renters are spending record sums on rent as well as becoming a larger part of the rental market as pensioners now foot the bill for every £1 in £14 of rental income.
Some claim that retirement renting is a time bomb which will stretch the finances of the elderly and cost taxpayers billions in housing benefit and care. The view raised concern amongst charities who warned this could leave older tenants vulnerable to poverty, poor living conditions and eviction.
Retired tenants, however, paid a total of £3.7 billion in rent during the last 12 months and now account for 8% of all private tenants, up from 5.2% ten years ago, with this figure expected to rise. Some argue that that these baby boomers shouldn’t be overlooked in favour of millennials, who have considerably less spending power.
We decided to do a little homework on the subject to find out who these silver renters are, why their numbers have increased 200% in the last decade, what kind of property they are looking to rent and where their money is coming from, so you can make up your own mind about whether you should be renting to more of them.
Who are the silver renters?
A spending shift has seen the over 50s spending more on household goods and services, rent, recreation, culture, cars and alcohol. In 2015 they overtook younger households for the first time and are now worth an estimated £473 billion a year to the economy.
Why have their numbers increased?
Because people are living longer than ever before, due mainly to improved healthcare, the elderly population is growing and more than half of those in rental accommodation are themselves former property owners.
What kind of property are older tenants looking for?
The average rent for older renters is £810 per month, which is up on last year, but they still pay 12% less than other tenants, due to them renting smaller properties.
If you want to attract older tenants, or decide to purchase another property with them in mind, then here are a few of the things they might be looking for in a rental property:-
•Safe and secure neighbourhood
•Low maintenance properties with smaller gardens
•Bungalow or ground floor apartments
•Close to amenities such as shops, restaurants, health centres, train stations and bus routes; ideally within walking distance
•Well maintained properties with adequate heating
•Security of tenure (i.e. assured tenancy)
•Permission to have a pet (in the case of those who live alone, some choose to keep a pet as a companion)
Where is the money coming from?
Whilst some older renters are forced to move into rental accommodation due to debt and may even have to claim benefits - others have been protected by the Government’s ‘triple lock’ state pension guarantee, which have helped push up their benefit receipts by 15% in the past five years. Income from occupational pensions has also rocketed.
When the default retirement age ended in 2011, increasing numbers of over 65s stayed in work, boosting their finances even further.
Retired renters are more likely to be long term tenants
Many of those living on private pensions are likely to have sufficient income to be able to afford to rent long-term and are more likely to settle into the same property for longer without having to move due to work commitments or school placements.
Legislation for the elderly
Whilst you will no doubt appreciate the stability and assurances often provided by elderly tenants, extra consideration should be given to the legislation surrounding them.
Under the 2005 Disabilities Discrimination Act landlords have an obligation to make ‘reasonable adjustments’ to their property when renting to the elderly, but you are not required to alter the physical features of the property, so would not be expected to install a stair lift or undertake large-scale changes.
Landlords who benefit from our fully managed service would of course be expertly guided through any of these processes and advised on the best course of action.
We keep up to date with changes to housing legislation and industry news so that you can benefit from our extensive knowledge of the private rental sector. We also aim to share property trends and industry insights that we think might interest you. Whatever decisions you make as a landlord, we will continue to adapt and make any changes that are needed to secure your business investment, and look to increase its value.
If you’d like to discuss the prospect of renting to more retired people, are concerned about rent arrears or want to pick our brains over anything else, please call us on 01480 218200
"I have always found Lovetts to be very responsive to any concerns I have. The monthly statement and my rent are always produced on time and they send out an annual statement for tax purposes which is invaluable. Of the 4 letting agents I have used over the past 10 years Lovetts are by far the best!"