When you think of the rental market, you might think of the under 30’s market waiting patiently to get their feet on the property ladder.
But the number of working age adults going into rental property and HMOs has grown at a fast rate.
The number of SpareRoom renters that are aged 55 to 64-years-old is on the rise.
Are you aware of the size of this market and are you marketing your properties to it? This blog post explains the shift and why you should be prepared.
Which demographics use rented accommodation?
The same site said there has been a 114% increase for the 45-to-54 age group.
Meanwhile Cohabitas, a site for the over 40’s, said it had seen a 51% increase in users aged 55 to 64. People aged 25 to 34 still make up the majority of sharers.
What is the housing trend for older people?
Population forecasts show that by 2043, the UK population aged over 55 will increase from 30% to 36%.
That represents six million more over 55s and approximately 26 million people in the age bracket.
In the near term, figures from the Office for National Statistics forecast that by 2028 there will be a 34.5% increase in the number of households whose main resident is between 75 and 84 years old and a 24.1% increase in households whose main resident is 85 or older.
Higher rates of divorce in later life, the cost of downsizing and less generous pensions are all accelerating this more.
ONS data shows the number of men divorcing aged 65 and over went up 23% between 2005 and 2015. For women of the same age, the number of divorcees went up by 38%.
Men are living longer – with the report explaining this is one of the main reasons for older renters.
Since the early 1980s, men have almost always experienced greater improvements in life expectancy at birth than women, with the life expectancy gap narrowing to 3.7 years.
At the same time, pensioner income has stagnated since the turn of the last decade.
Inflation averaged 3.1% a year over the period 2009-2019. The low interest rate environment of the past decade has also limited income from savings.
What are the reasons for the shifting demographic for rented accommodation?
SpareRoom communications director Matt Hutchinson said affordability was the main reason that older people were house sharing.
The report found that more people are becoming “lifetime renters”, while people who have come out of long-term relationships and might originally have bought or rented a one-bedroom flat were now priced out.
Sarah Coles, a senior personal finance analyst at Hargreaves Lansdown, said official figures suggest renters are getting older.
Rental prices in the UK have been increasing steadily since Covid restrictions were eased in the summer of 2021.
From April to June, property website Rightmove found average asking rents outside of London hit a record £1,126 per month – up 11.8% on the same period last year.
Cohabitas is a website that advertises house shares for people over 40. They said that they’ve seen a 44% increase compared to the same period last year.
For 55 to 64-year-olds the increase was 51%, while for 45 to 54-year-olds it was 35%.
Co-founder Eva Orasch said the long-term trends driving the increase in sharing among older age groups were the UK’s ageing population and increased house prices.
In the short-term, she said the rising cost of living and the pandemic were also contributing, with some people no longer wanting to live alone after lockdown.
In a 2021 survey, the website found 45% of respondents had chosen to share for purely financial reasons, while 48% were sharing for both financial and social reasons.
How should landlords invest in older tenants?
Research from Paragon showed that a fifth of landlords expect growth in the market for retired renters over the next year.
This cohort of tenants typically stay in a property for longer, maintain the home well and benefit from a stable income, usually in the form of a pension.
Homes need to cater for the physical restrictions that some of these tenants may face, while this tenant group is much more likely to have a disability or long term illness.
Rowntree said: “Landlords are already reacting to the changing demographics and with older tenants becoming more commonplace, will have to increasingly do so.
“Landlords will need to consider longer tenancy agreements, the location of their property and any adjustments the property may need for later life tenants.”
What to do next?
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