9:38 AM, 17th July 2023, About A year ago 1
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The private rented sector (PRS) needs to prepare for more than one million tenants being over the age of 65 by 2033, a report reveals.
The findings from Hamptons highlight that a major shift is underway as older generations are increasingly opting for or staying in rented accommodation.
According to the data, the proportion of households aged over 65 that rent their home privately will double from 5.7% to 11.5% in the next decade.
That means that more than one in 10 retirees will be renting, compared to one in 20 today.
Aneisha Beveridge, the head of research at Hamptons, said: “The rising number of older renters reflects the gradual unwinding of the large increase in homeownership rates after the Second World War.
“As younger generations who missed out on the homeownership boom age, growing numbers are likely to be renting when they retire.”
She added: “The recent rise in mortgage rates will make it harder to buy later in life.
“It’s long been the case that if you’re not on the ladder by 40 years old, it becomes more difficult – but higher mortgage rates will make this challenge even tougher given the difficulties in stretching a mortgage term to reduce monthly payments, particularly in the early years.”
The report also estimates that the annual rent paid by older tenants in England will increase from £5.1bn to £12.7bn, assuming there is no rental growth.
Hamptons says the rise in older renters is down to several factors, including lower homeownership rates, divorce and separation, inheritance and pension changes, and lifestyle preferences.
The report also warns that older tenants may face challenges such as affordability, security, accessibility and social isolation.
Ms Beveridge said: “As households get onto the ladder later in life, over the next decade there’s likely to be an increase in older households still paying off their mortgage beyond the age of 65.
“However, this increase is likely to be a small fraction of the growing number who will be paying rent beyond pensionable age, which in turn has the potential to bear significant social, economic and political consequences down the line.
“Rents are rising across the board, which suggests that the supply squeeze and rising landlord costs are pushing up rents across the market.”
She added: “Additionally, high mortgage rates, which have priced out would-be first-time buyers, are stoking rental demand.
“While there are a similar number of households looking to rent as in 2019, there are 47% fewer homes available.
“With interest rates set to stay higher for longer and few new landlords buying, these pressures seem likely to continue in the medium term.”
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Sign Up19:37 PM, 17th July 2023, About A year ago
Unless you earn at least 2-3 times average wage and have a bunch of savings behind you getting on the housing ladder is pretty near impossible especially if you are paying rent. The result is that many people will stay renting and renting will no longer be the province of younger people. Unless these older tenants have made adequate provision for retirement income they are in for a pretty miserable existence and will probably have to work until they no longer can at which time they won’t be able to pay the rent and will get evicted. At this point many will probably go into care but at least it will be free, as there is no house for a Council to seize to pay for it and they are unlikely to have much in the way of savings.