Number of retired who are renting homes has soared
The number of retirees and older people moving into rented accommodation has increased by 13 per cent in the last four years — as a result of a number of factors including higher property maintenance costs, difficulty in downsizing and the need for the elderly to move closer to other family members.
The data shows that it is not just the priced-out younger generations who are swelling the number of tenants.
Between 2012 and 2016 the number of retired renters soared by 200,000 according to figures from the National Landlords Association.
Figures from the first quarter of this year showed a continuing trend. According to the data, 19.96 per cent of renters are retired — a rise of three percentage points since the end of 2016.
Linda Clarke has been renting for the past five years and has no regrets. Her decision to sell and rent came after a long battle to keep up with the repairs of the three-bedroom semidetached house in Eccles. Her husband died in the late Eighties.
She said: “The house wasn’t falling down by any means, but it needed updating. The kitchen was new in 1987.
“It’s alright if you know a plumber, an electrician or a builder, but I didn’t. I didn’t feel I was in a position to fix up the house myself.”
The first property she rented was not ideal. It was a furnished flat in a large complex. Now she and her partner Jose Louzeiro rent a four-bed semi, also in Eccles, for £785 a month.
The maintenance is handled by her landlord.
She is at risk of future increases in rent or from the landlord serving her notice, but she is confident that her income — either earned or pension — will be adequate.
She has no children and is not anxious to bequeath savings to anyone else. “Right now, I just want to live for the moment”, she said.
The burden of property mainte- nance is a major factor in encouraging older people to rent, said Chris Norris, head of policy at the National Landlords Association.
But the lack of suitable property into which older owners can downsize, coupled with high rates of stamp duty, mean many sell and cease being homeowners altogether.
“Homeowners can often feel oppressed by the costs and stress of upkeep, especially when things go wrong and they don’t know who to turn to”, he said.
“Being a private renter is rela- tively stress free.”
Mr Norris said the growing incidence of relationship breakdown in later life was also driving an increase in renting.
But he warned that the private rental market was not serving older tenants very well.
A large proportion of properties to let are in shared blocks of older buildings with stairs, and unsuitable to retirees as a result, he said. He said space is also an issue. “Developers don’t tend to consider the size of a property in square feet. But when someone is downsizing from a family home to a two-bed flat the difference in space can be quite a shock,” he said.
Paul Staley, director of the private rental sector at SDL Group, a property services company, suggested older people could be seeking a more flexible lifestyle and not be tied down to a mortgage.
“Older renters may also be looking to release equity from their homes and are simply not yet ready to enter a retirement complex”, he added.
Patrick Connolly, a chartered financial planner at Chase De Vere, the financial advice firm, said one benefit of renting is that there is far more flexibility in terms of where you live. It’s “much easier and cheaper to move” as a tenant, he said.
He also suggested that renting could boost retirement income as older people may be able to save larger amounts into pensions and investments because they don’t have money tied up in property. But he also warns of the risks. The biggest downside to renting in older age is the lack of security of tenure. Tenancy agreements do not last forever.
The rent could also rise at any time. Mr Connolly said this could make it more difficult to budget effectively as “they have little control, outside of their contract”.
He said the issue is “compounded”, on a comparative basis, “in the It’s alright if you know a plumber, an electrician or a builder, but I didn’t. I didn’t feel I was in a position to fix up the house myself.” Linda Clarke, renter