The Covid-19 pandemic has placed the property industry at the centre of national headlines. The UK government has made it clear that homes are going to be central to its efforts towards keeping the economy strong in a volatile time.
Before the pandemic, however, there was another important property story beginning to gain traction in the national media – more people are now renting for much longer stretches of their lives which means we have far more older people renting than we’ve ever had before.
When Covid struck, all attention shifted to the sales side of the housing market – buying and selling homes is vital to a strong economy – and so this important change in our society fell out of the news cycle.
Renting in middle-age and beyond
Data from the UK government shows that people aged 35 to 44 years were almost three and a half times more likely to be renting in 2017 than in 1993 (see graph below). In the three years since, this trend has continued and is expected to do so for many years to come.
But it’s not just middle-age folks who are renting more. In the decade between 2007 and 2017, the number of over-60s living in rented homes grew from 254,000 to 414,000. By the year 2040, it is expected that over one-third of over-60s will live in privately rented homes.
This increase does, of course, reflect an overall rise in the number of people renting in the UK. Between 2007 and 2017, the overall number of people renting grew by more than 60%, but the increase in older people renting is still a surprise, and can be seen as a direct reflection of how our society is changing.
Why are renters getting older?
First of all, house prices are getting higher and higher while mortgages are becoming less accessible. In the mid-1980s, the average house cost less than £100,000, by the early-2000s, it was around £150,000, and, as has recently been reported, the average house price today is over £250,000.
At the same time, mortgage lenders have become more demanding of their customers. Whereas once upon a time you could pick up a mortgage with a tiny deposit, often 10% or less, nowadays, you’re closer to at least 15-20%. This requires people to have large sums of money available up front, often as much as £30,000. For many of us, this is difficult to achieve.
Another contributing factor is the difficult time many young people have had since the global economic crash of 2007. This is the moment mortgage providers truly upped their requirements, and when levels of employment for graduates and young people fell dramatically. This was also around the time that universities started charging hefty tuition fees, setting many people up with instant debt which those who went before them did not have to struggle with.
As a result, more and more older people have been offering financial support to their younger relatives – kids and grandkids. This often includes helping to buy homes which would otherwise be unattainable. As such, more over-60s are choosing to sell their homes to free up some money to help their loved ones. The common trend is to then downsize to a manageable rented home.
How will we care for older renters?
The aspect of renting which many find most challenging is the lack of security. Being at the mercy of a landlord or letting agent means that homes can be stripped away from people at pretty short notice. If a landlord decides, for example, to sell the home you’re renting, you can have as little as four weeks to get out, even if you’ve lived there for many years.
For older renters, and especially those in their later years, any such disruption can be far more challenging to deal with than it is for their younger peers.
Efforts are being made to increase security for renters, giving them more power and removing some from the landlord. As more over-60s enter the world of renting, we should hope to see more protective measures taken to ensure that renting comes with as much security as possible for those people who need it most.
One way in which this is being done is by building more rented accommodation specifically for older people. The so-called Build-To-Rent sector (which sees developers build large buildings or complexes and then rent them directly to tenants) promises a future where older renters will be able to be part of a close community of fellow older renters and where rental agreements will be specifically tailored to help and protect aging renters.
As the For Sale sector grabs most of the property headlines over the coming weeks and months, it’s important to remember that, while the rental sector doesn’t feature in the government’s economic recovery strategy, it is still where a large number of us spend our lives and therefore demands our careful attention. Being a renter should not have any sort of detrimental effect on our lives, certainly not as we get older.