NEWS: Number of older people in private rental accommodation could treble in the next 20 years
More older people than ever will be living in rental accommodation in the next 20 years, projects a new study. Generation Rent, which campaigns for affordable, secure and professionally managed, privately rented homes, predicts that by 2035, nearly 1 million households of retirement age will be renting from a private landlord.
When it comes to problems in the renting market, the focus is very often on younger people who are struggling to get on the property ladder. But this report, called Life in the Rental Market and co-authored by David Adler of Oxford University, suggests that the current figure of 370,000 households will rise rapidly.
This is based on the statistics that are currently available to help predict this trend. Figures of home buyers aged over the age of 45 are declining, so they will not own a home when they retire. At present, data from an English Housing survey shows that over a million 45-to-65 year olds are currently in private rental homes, and of those, only 167,000 are likely to go on to buy a property. Add to this the fact that social housing isn’t being built as fast as demand requires, as it’s clear that the private rental market will boom in this upcoming generation.
People are less likely to buy a home over the age of 45 if they don’t already own one, as they face difficulties in obtaining a mortgage that will extend to or past retirement age, making it difficult to own a property in later life unless you have been on the ladder from a younger age. Unfortunately, as house prices continue to rise at a rate faster than income and higher deposits are required, it’s much harder to get on the property ladder in the first place.
It’s a costly business too. Those who own their own home have lower costs when they retire, as usually mortgages are paid off before retirement age, so outgoings are reduced to the basic bills. Plus, there is the option to sell and downsize, releasing some of the equity in the property.
Those without a property they have purchased, will have ongoing rental costs as well as bills. Many will need to rely on housing benefit to help pay for the rent costs. The study suggests that if there are an extra 600,000 housing benefit claimants, this will cost the state £3.46bn per year based on today’s prices. These stats highlight the need for reform in housebuilding and rent reform policies.
These kinds of statistics highlight how important it is to start thinking about retirement from a younger age and make sure that you are prepared financially for later life.