Retiring Renters Represent A Growing Market
As a landlord, there are many things you need to consider. It is important you consider rental yields, and the type of rental property that is in demand. Recently, the demand for rental homes has outstripped the demand for rental flats and apartments in some cities and towns across the country.
The rental market is continually evolving, and landlords need to stay in touch with the market. In the past decade, there has been a change in who rents property. According to information provided by Paragon Bank, retiring renters represent a growing market.
In the past ten years, in the private rental sector with assured tenancies, the number of households that are classed in the 55 to 64-year-old category has risen by 118%.
The next fastest growing group is the 35 to 44-year-old group, but this has only increased at half the rate of the 55 to 64-year-old category.
Landlords should take note of the growing importance of this group, and that this group is happier to stay in private rental property for longer.
Renting suits many people’s needs
68% of tenants aged 55 or over said renting suited their needs and that they enjoyed renting. For people younger than 55, only 49% of respondents said they were happy with renting.
Another positive reason cited by the 55+ age group was that they didn’t need to worry about repairs. 63% of respondents said this was a significant factor for them.
Landlords can benefit by reaching out to this group of tenants
Therefore, if you are a landlord looking to keep tenants happy, and minimise the risk of void periods, it might be worth considering who you let to. The 55+ group appears content with renting, so if you provide a good standard of service for them, they are likely to stick around.
Richard Rowntree, Paragon Bank Managing Director of Mortgages, comments: “There are a number of factors that may have contributed to the increase in over 55s in the PRS over the past 10 years, such as rising divorce amongst older people, poorer pension returns and men living longer. With the number of over 55s forecast to rise from 30% of the population to 36% by 2043 and new household formation predicted to be driven by older, single-person households, the PRS will have an increasingly important role to play in providing a home for older tenants.”
The size of the group of tenants aged 55 or older stands at 576,000 people. This represents 16.2% of the rental population. A decade ago, this age group only represented 11.3% of the rental market.
The study also finds landlords expecting to let to this market. 21% of landlords said they expect to let to a greater number of older single people in the future, and 20% of respondents said they expect to let to retirees.
Renting works for many tenants
Some of the leading reasons cited by these tenants as to why they are happy to rent at this time of their life include:
• 39% of respondents saying they are unable to arrange a mortgage deposit
• 22% of respondents say they are happy to not have the responsibility of home ownership
• 16% of respondents say it has provided them with the chance to live in an area they couldn’t afford
• 15% of respondents say it has provided them with the flexibility to move easily if required
Richard Rowntree of Paragon Bank Managing Director of Mortgages also said; "Landlords are already reacting to the changing demographics of the PRS 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.”
If you are interested in our lettings or property management services or you are looking to buy, sell, let or rent property in or around Willesden, Neasden or North West London, call us on 020 8459 2530 and a member of our estate and letting agent team will be happy to help.