Rise of the mid-life renters
As even mature couples struggle to get on the housing ladder, does it make sense to opt out of ownership?
RISING numbers of Britons will still be renting in retirement — but for some, this isn’t necessarily a bad thing.
Statistics released this month show that over a decade, the number of those renting ahead of retirement has gone from one in 20 to nearly one in ten.
Yet Money Mail has spoken to older tenants who can afford to buy, but rent for the flexibility and even luxury owning a home does not always offer.
There has also been a jump in the number of top- end properties being built to rent. They are usually flats owned by pension companies or large developers who employ professional management companies to run them.
They are modern and offer extras such as a gym, concierge service and communal lounges.
Previously, these types of properties were available only to buy. But increasing numbers of so-called purpose-built rented homes are popping up all over the country. There are 35,000 in the UK and a further 110,000 are being developed, according to the British Property Federation.
David and Clare White certainly didn’t expect to find themselves renting in their 50s. But after their children left for university, they decided to sell their family home in Chester and move to London.
David, 58, a management consultant, needed to be nearer the capital for work while Clare, 55, wanted a move.
They settled on an apartment in a new, upmarket development in Wembley, North-West London.
Clare, a retail assistant, says: ‘We chose to rent because we didn’t know what the next stage of our lives would hold and we love the freedom. We don’t have to worry about maintenance and the complex is really sociable. The only downside is that we are limited on space.’
HOWEVER,
such upmarket rental properties come with an expensive price tag. Residents can expect to pay from £1,595 to £3,670 a month for one of the 1,500 luxury flats like David and Clare chose.
The cost includes John Lewis furnishings, Samsung appliances, parking and all utility bills except for council tax.
Prices vary around the country, but typically they are 11 pc higher than local rents, according to property agents JLL.
In Salford, apartments in Clippers Quay cost between £900 and £1,500 a month, including wi-fi, while tenants of Bow Square, Southampton, would pay between £850 and £1,350, with utilities on top.
Over a decade the proportion of those aged between 55 and 64 who are privately renting has almost doubled to 9.3 pc, Office for National Statistics figures show.
Meanwhile, the percentage of 65 to 74-year-old renters has risen from 4.6 pc to 6 pc. More than 5 pc of over75s are tenants, up from 3.8 pc.
A third of people in their mid-30s to mid-40s were tenants in 2017 — compared with fewer than one in ten 20 years previously.
Charity Age UK estimates there are now 750,000 over-60s in England living in rented homes, and MPs have predicted by 2046, there could be more than 1.5 million pensioners renting.
Retirement villages are also open to renters as of last year. The apartments are easily accessible for those who may rely on walking aids or wheelchairs. Care can be received at home for an extra fee. The change follows criticism that these homes are hard to re-sell.
Eye-watering service charges of more than £400 a month and annual ground rent have put off future buyers — meaning homeowners, or loved ones who have inherited the properties, have to discount the price heavily.
Inspired Vi l - lages has opened its schemes to renters, and more recently McCarthy & Stone announced plans to do the same.
But again, the price tag is steep. Singles renting from Inspired Villages will pay £660 a week and a couple sharing, £911. Benefits included are utilities, breakfast, a three-course meal a day, daily flat cleaning, laundry and maintenance.
Residents also have free access to a gym, pool, exercise classes and social events. Joe Oldman, policy officer for housing at Age UK, says: ‘[Renting] used to be for students and young professionals, but it has changed from a short-term solution to a long-term living arrangement for many.’ While retirement rental homes are often priced high, the industry is looking at ways to bring costs down, he adds. Experts say villages tend to pop up in areas such as London, Bristol and Edinburgh, which have seen the biggest house price rises, as downsizers will have substantial equity to cover costs. But homeowners who find themselves renting in later life will need to remember they will not have property equity they can fall back on in retirement, and have to be able to pay their rent from pension income. They also won’t have a home to pass on when they die. A drawback faced by older tenants who rent from individuals rather than companies is difficulty getting a home adapted for mobility needs, an issue Age UK has teamed up with National Landlords Association to address.
Lynn Anderton, 58, began renting after her marriage ended. She has lived in the same three-bedroom house on the Wirral for 12 years, paying £500 a month.
At first Lynn, a life coach, saw renting as a temporary solution, but she now enjoys the freedom it offers.
‘ I realised I didn’t want the responsibility of a mortgage,’ she says. ‘I wasn’t in secure employment at the time and although I had some money from the sale of the property, I wasn’t in a good place to take something on.
‘Because I don’t own the house I can think about it as a home, not an asset I have to improve.’
However, she admits she has not yet given much thought to how she will afford the rent in retirement.