Retiree renters are the fastest growing tenant segment in the private rental sector

Posted on Thursday, November 12, 2020

Research from Paragon Bank has revealed that, over the last decade, the number of English households in the 55-64-year-old age category in the PRS with an Assured Tenancy has risen by 118%, making retiree renters hot property for UK landlords.

Data from Paragon found that this rate of growth is nearly double the rate of the next fastest-growing segment – 35-44 year-olds.

Later life tenants are generally happier in private rented accommodation that other age groups and have lived in the PRS for longer. 68% of over 55s said that renting suited their needs or they enjoyed renting, compared with 49% in the under 55 group, whilst an overwhelming majority of 63% said they were pleased they don’t have to worry about repairs.

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.”

At 576,000, those aged over 55 represent 16.2% of privately rented households and this has steadily grown since the turn of the decade when 11.3% of the sector was made up of over-55s.

Paragon’s research showed landlords appear to be responding to this change in demand, with 21% of landlords expecting to let more to older singles in the future and 20% expecting to let to retirees. This was second only to letting to professionals or executives/companies.

When asked about the reasons for renting, 39% said they didn’t have a mortgage deposit, whilst 22% said they didn’t want the responsibility of owning a home – compared to 9% of under 55s – and 16% said it enabled them to live in an area they couldn’t afford to buy and 15% because it gave them the flexibility to move easily

Tenants in the 55+ category are also much less likely to want to own their home – 45% compared to 81% of under 55s. Of those who do, 62% don’t think they will be able to afford their own home, whilst 18% believe they will buy within the next two years. Over 55s are much more likely to live alone, with 48% in this category versus 23% of under 55s, and they also tend to live in the property for a long period. They are also much more likely to be men, accounting for 62% of tenants

Paragon also found that 49% of over 55s have lived in only one or two rented properties; of those who have lived in only one property, 46% of tenants have lived there for 10 years or more. The average length of time tenants have lived in the PRS is 13 years.

Population forecasts show that by 2043, the proportion of the UK population aged over 55 will increase from 30% today to 36%, or 26 million people.

Tenants in the 55+ category are also much less likely to want to own their home – 45% compared to 81% of under 55s. Of those who do, 62% don’t think they will be able to afford their own home, whilst 18% believe they will buy within the next two years. Over 55s are much more likely to live alone, with 48% in this category versus 23% of under 55s, and they also tend to live in the property for a long period. They are also much more likely to be men, accounting for 62% of tenants

Paragon also found that 49% of over 55s have lived in only one or two rented properties; of those who have lived in only one property, 46% of tenants have lived there for 10 years or more. The average length of time tenants have lived in the PRS is 13 years.

Population forecasts show that by 2043, the proportion of the UK population aged over 55 will increase from 30% today to 36%, or 26 million people.

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