A report by the Social Market Foundation (SMF), with analysis conducted on behalf of Paragon Bank, has found that homes headed by a person over the age of 45 will account for at least half of all privately renting households by 2035.
Where next for the private rented sector? found that 35% of households currently private renting are headed by somebody aged 45 or over.
This will rise to half of households by 2035 according to the SMF’s projections, equating to an additional 1.14 million households, bringing the total number of 45+ households to 2.7 million.
Conversely, the proportion of households in the sector where the head is aged 34 or under will fall from 39% today to 35%. Those in the 35-44 age group will experience the greatest decline, falling from 25% of households today to 15% in 2035.
The SMF modelled its projections on housing market trends experienced between 2009 and 2019. Overall, it forecasts that the proportion of total households privately renting will increase from 20% currently to 22% in 2035, with those in home ownership falling from 63% to 61%.
Richard Rowntree, Paragon Bank managing director of mortgages, said: “The UK has an aging population and projections show that the popular will generally be older in the coming years. This is reflected in the SMF’s modelling, which highlights that a growing proportion of older households will live in privately rented accommodation in the next 15 years.
“The challenge for the private rented sector is how to adapt to accommodate more mature tenants, including where and how they want to live. The SMF tenant research shows that more mature tenants want greater security in the form of longer tenancies and control over their property, such as the freedom to make cosmetic changes. They also want to have pets in their homes and these are all things landlords need to consider.”
Amy Norman, SMF senior researcher and one of the report authors, added: “The typical renter of the future will look different from today’s. How different will depend on a range of factors including rates of construction, interest rates, house price inflation and government housing policy. That said, one thing is clear: the private rented sector will be getting older.
“That reality means we need to revisit our preconceptions about renting being the preserve of young, mobile households. Mature tenants have different needs and preferences. They want accessible, ground-floor homes within a stone’s throw of shops, transport links, health services, and their loved ones. Policymakers, developers, and landlords therefore face a challenge ahead to future-proof the private rented sector and ensure that renting policies and homes are suitable for all tenants, including those who are renting for longer and into later life.”
SMF’s survey of over 1,300 tenants showed that 61% of tenants in the 35-54 age bracket currently expect to still be renting in 15 years’ time, falling to just under a third (32%) for those aged 34 or under. Over four in five (81%) renters aged 55 or over believe they will still be renting in 15 years.
In terms of what is important to more mature tenants with regards to the location of the property, there are clear differences in priorities compared with those in younger age brackets.
48% of those aged 55 or over said that being close to shops was in their top three priorities, compared to 32% of those aged between 35 and 54. Good transport facilities (40%), being close to friends and family (36%) and proximity to health services (34%) also scored highly for those aged 55+.
With regards to what renters want from a property, 41% of those aged 55+ said having an unfurnished property was in their top three priorities, compared to 16% of 35-54 year olds and 11% of 18-34 year olds. This age bracket also expressed a greater desire for pets, with 21% stating this was a top priority, compared to 14% of those aged 34 or under.
