Think of the average UK tenant and images spring to mind of students or 20-somethings building up their careers and relocating regularly, as they change jobs or win promotion. These are people who are renting while saving up to get a foot on the property ladder. Many people will find it surprising that one in 12 tenants is a pensioner, according to research by lettings agent, Countrywide. Some of these new members of Generation Rent are living in rental accommodation which is available to all, but others are choosing to rent in specialist retirement complexes.
There could be many reasons why older people are turning to rental accommodation for their housing needs. One significant factor is the retired divorcees who are starting to rent in record numbers. Know as ‘silver splitters’, it is a growing trend for couples to split once the children have left home. Once the money has been divided, they may find they cannot afford to buy a decent house or they don’t want the burden of a mortgage.
Many are renting out of necessity, rather than through lifestyle choice. As well as the divorcees, pensioners may be renting because they cannot afford to buy. Others may have been living abroad, but have decided to move back to their home country when they get older, particularly if their health is failing or their partner has died. Renting suits this generation because they have control of their finances. They know how much they need for their rent, household bills and living expenses, and it can often free up cash that was tied up in the house, without the hassle of an equity release.
Renting on an assured tenancy gives peace of mind, with management fees included and annual rent rises capped to the Retail Price Index. Renting in specialist retirement properties can mean pensioners can afford to live in parts of the country, such as London, which they could not otherwise afford.
With an ageing population in the UK, investing in specialist retirement developments could be a sound financial choice for landlords. Although it is a niche market, it is a growing sector and it seems as though many older people are prepared to pay more for the quality of life in a retirement village or complex, such as a gym, spa, nursing services or a 24-hour concierge. You also have a specific target market and so can develop a marketing strategy to appeal to this age group. Another advantage is there is less wear and tear on the property, because there won’t be any children living there.