More older people could rent homes, says study

OLDER PEOPLE are more likely to be living in the private rental sector than today if current housing trends continue, says the Office for National Statistics.

About three in 10 people aged 35 to 44 in England were renting from a private landlord in 2017, compared with fewer than one in 10 in 1997.

Declines in home ownership rates at younger ages may have an impact on the type of accommodation older people live in, in the future, according to the ONS.

The report suggested there may be some advantages if more older people are renting privately in the future. For example, it may be easier to move into more suitable accommodation if needs change, rather than relying on a house sale.

But the potential benefits of living more flexibly in the private rental sector in older age could come at a price – and may mean people need to have saved up a much bigger pension pot than if they were a homeowner.

The report said: “A market rent that is affordable to someone of working age may cease to be affordable after retirement, when income decreases.

“Research suggests that someone who owns outright could expect to maintain their living standards on a pension pot of £260,000, while someone who rents privately would need almost double this (£445,000).”

Meanwhile, the current generation of over-65s are much more likely to own their home outright, with no mortgage left to pay, than their age group in the early 1990s.

Nearly three-quarters of people aged 65 and over owned their homes outright in 2017. The ONS said this includes the first to benefit from Right to Buy, which saw social housing stock sold at reduced prices from the 1980s.