Rental market shift to over 50’s demographic – report
The under-30 market that is patiently trying to climb the property ladder may come to mind when you think about the rental market.
However, the number of working-age people moving into rental homes and HMOs has increased quickly.
The proportion of SpareRoom tenants who are 55 to 64 years old is growing.
Are you promoting your properties to this market and are you aware of its size? This blog post describes the transition and the importance of being ready for it.
Which groups of people use rental accommodation ?
Since 2011, the number of people aged 55 to 64 looking for houseshares has increased by 239%, according to the top flat-sharing website SpareRoom.
The 45 to 54 age range has seen a 114% growth, according to the same website.
Cohabitas, a website for people over 40, reported a 51% rise in members between the ages of 55 and 64. The bulk of sharers are still between the ages of 25 and 34.
What is the over 40’s housing trend?
According to population projections, the proportion of people over 55 in the UK will rise from 30% to 36% by 2043.
There are now about 26 million people in the over-55 age group, or six million more than the last stats from the ONS
According to data from the Office for National Statistics, the number of households with a main resident aged 75 to 84 will increase by 34.5% and the number of households with a main resident aged 85 or older will increase by 24.1% by 2028.
Many of these households, according to Paragon’s research, are likely to become renters rather than homeowners in the future.
This is being accelerated even faster by shrinking costs, higher rates of divorce in later age, and less generous pensions.
According to ONS data, the number of men 65 and older who divorced increased by 23% between 2005 and 2015. Divorce rates increased by 38% for women of the same age.
One of the main causes of older tenants, according to the survey, is that men are living longer.
Men have virtually always seen bigger increases in life expectancy at birth since the early 1980s, with the difference in life expectancy shrinking to 3.7 years.
In the meantime, pensioner income has been constant since the beginning of the previous decade.
Over the years 2009 to 2019, inflation amounted to 3.1% annually. Savings income has also been constrained by the low interest rate environment over the last ten years.
What factors account for the changing demographic of renters?
Affordability, according to Matt Hutchinson, head of communications for SpareRoom, is the primary driver behind older people house sharing.
According to the survey, more people are “lifetime renters,” and those who have ended long-term partnerships and may have previously purchased or rented a one-bedroom apartment are now priced out.
Official data, according to Hargreaves Lansdown senior personal finance expert Sarah Coles, indicate that tenants are increasing older.
Since Covid limitations were loosened in the summer of 2021, rental costs in the UK have been steadily rising.
According to the BBC, a 3.2% increase in rental costs occurred in the 12 months leading up to July as a result of increased demand.
The average asking rent outside of London reached a record high of £1,126 per month from April to June, up 11.8% from the same time previous year, according to real estate website Rightmove.
A website called Cohabitas promotes housing shares for persons over 40. According to them, there has been a 44% increase over the same time last year.
55 to 64-year-olds saw an increase of 51%, while 45 to 54-year-olds had a 35% increase.
Co-founder Eva Orasch stated that the UK’s ageing population and rising house prices were the long-term trends causing the surge in sharing among older age groups.
She claimed that in the near term, the pandemic and growing living expenses were also factors, with some people no longer willing to live alone after lockdown.
The website conducted a study in 2021 and discovered that 48% of participants shared for both financial and social reasons, while 45% chose to share for only financial reasons.
How can landlords make an investment in senior tenants?
According to Paragon research, a fifth of landlords anticipate that the market for retired renters would expand over the coming year.
This group of tenants often occupies a property for a longer period of time, takes good care of the property, and enjoys a steady income, typically in the form of a pension.
Homes must be able to accommodate the physical limitations that some of these tenants may have, as they are considerably more likely to have a handicap or chronic illness.
According to Rowntree, landlords must adapt to the shifting demographics more frequently as older tenants become more prevalent.
“Landlords will need to take into account longer lease terms, the location of their property, and any modifications the property may need for tenants in later life.”
What will we do next?
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