A significantly increasing proportion of the population are these days choosing to rent rather than buy, reports Landlord Today in an article dated the 13th of November 2018 – and large number of these are already in their retirement.
Reporting on research conducted by the Institute for Fiscal Studies, the Guardian newspaper reported on the 16th of February 2018 that the proportion of young homeowners between the ages of 25 and 34 had fallen to just 27% from a high of 65% some twenty years ago.
Meanwhile on the 11th of May 2018, the Independent newspaper reported that the number of renters in middle age has also doubled in the past 10 years.
The population is also steadily growing older – with the report by Landlord Today noting that some parts of the country (notably the southwest) likely to have as much as 40% of their number over the age of 65 within the next 18 years or so. A greater proportion of them are likely to be renting in the private sector, rather than owning their own home.
Compared to younger groups and even the middle-aged, retirement renters might not be the amongst the growing numbers of people who expect never to own their own home. Instead they may include large numbers of those who decide to sell their home as part of a downsizing exercise, are looking to free themselves from the ongoing costs of maintaining a home or have been affected by the death of partner or marriage breakdown.
Whatever the reasons for the move into rented accommodation, however, retirement renters are likely to face the same problems with declining levels of income in relation to the spiralling cost of rent.
As we reported in an article on the 6th of December 2017, pensioners spend an average of 32% of their £2,374 income each month on rent. Within the next 6 years, however, that average income is likely to have risen to £3,706 meaning that their rent is likely to account for 42% of their spend.
There are regional differences in these figures of course, as illustrated by the statistics relevant at the end of 2017:
- retirement renters in London were then spending an average 66% of their income on rent alone – and that percentage could rocket to a massive 80% by the year 2032;
- although not generally known for its high rents, the east of England posted the next highest levels of rent for retirees, with the average accounting for as much as 45% of their income;
- less of a surprise, perhaps, is the 39% of pension income likely to be spent by retirement renters living in the southeast of England;
- more comfortably off are likely to be those retirement renters in Wales and the northeast of England, who are likely to be paying 24% and 25% of their incomes respectively on a place to live.
Despite the relatively high cost of renting in certain parts of the country, the number of retirement renters is nevertheless on the increase.