We tend to think of renters as being mainly young people – but new research has shown that over the past ten years, the number of middle-age and later life tenants living in privately rented homes has accelerated faster than those under the age of 35.
The study, commissioned by Paragon Bank, showed that between 2011 and 2021 there was a 110 per cent increase in rented households where the lead tenant was aged between 55 and 64, and a 50 per cent increase in those where the lead tenant was aged between 45 and 54.
There was a corresponding increase in retired renters, with the number of households headed by over 65s rising by 38 per cent.
Over the same period, the number of rented households headed by 25-34 year-olds rose by only six per cent, whilst the number of 16-24 year-olds renting actually fell by 3.7 per cent.
All of this rather challenges the stereotype of private renters being young and transient, with the study also showing a large increase in the number of tenants staying in their rented homes for more than five years.
This has some implications for landlords, who may need to rethink the kind of homes they are investing in given that this is a long-term trend.
There are all sorts of reasons for the increase in older tenants. They may be releasing equity in their homes to help younger generations, and then opting to rent to give themselves maximum flexibility and easy access to the wealth they have built up and which might otherwise be tied up in their homes and largely unreachable.
Couple this with an increase in ‘empty nester’ marriage break-ups leading to more older single person households, and you can see the reason for this growth.
How does it affect landlords? Well, they will need to think about what kind of home this older cohort will be looking for.
Those in mid-life are more likely to have families, and so will need larger homes; those downsizing in later life are more likely to want easy-to-maintain homes which are close to amenities – we are already seeing a trend towards city living for older people.
This group of people may also demand a greater flexibility about making adjustments to their homes, or to having a pet – and they will almost certainly be looking for more security and longer-term tenancies. The flip side to this, of course, is that older tenants are more likely to look after a rented home.
With an ageing population, this trend is only likely to continue, and for those investors savvy enough to recognise it and adapt their offer, there will be good opportunities to find secure, high-quality tenants for the long-term.
Phil Cooper is lettings partner at Arnolds Keys. www.arnoldskeys.com
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