More attention should be paid to tenants considered ‘too old’ to get a mortgage and who face a lifetime of renting, urges campaign group Generation Rent.
What’s the latest?
The number of pensioners renting a home looks set to triple to nearly one million by 2035.
Around 370,000 people aged over 65 currently live in private rental accommodation, but the number is set to soar to 995,000 by 2035, according to campaign group Generation Rent.
The group said the huge increase in older renters was being driven by the difficulties people faced getting mortgages with terms that go beyond their working life.
It said the prospect of spending a lifetime renting was fuelling demands for reform of the rental sector, to enable those who would never buy a property to have cheaper and more stable homes.Above: In Didcot, Oxfordshire, this two-bedroom semi-detached bungalow, overlooking allotments, is available for £295,000
Why is this happening?
Housing affordability is one of the key factors driving the rise in the number of people who will never own their own home.
The fact that house prices have risen faster than wages for several years has left many people unable to get on to the property ladder, either because they cannot save a big enough deposit or they are unable to borrow the income multiples need.
The problem is exacerbated by the fact that many mortgage lenders are reluctant to advance loans to people with terms that will continue once they have retired due to concerns about affordability.Above: For £345,000, this two-bedroom semi-detached house is available in Pennington, New Forest, about 1.5 miles from the river, marinas and yacht clubs
Who does it affect?
Being stuck in rental accommodation is a predicament for people who are no longer working.
If they had bought their own property and repaid the mortgage, their housing costs would be minimal by the time they retired.
But those renting from a private landlord will have to continue to pay for their home, with many likely to rely on housing benefit to help meet the cost.
Generation Rent estimates that if the additional 600,000 pensioners who are expected to be renting by 2035 all claimed housing benefit, it would cost the state £3.4bn a year in today’s prices.
Sounds interesting. What’s the background?
A survey carried out by the group found that while the majority of renters would like to buy their own home, preferences shifted as people got older.
Renters aged over 60 were almost twice as likely as those in their 20s to prefer an affordable rental property over homeownership.
Older tenants were also 30% more likely to support the building of more social housing than younger ones.
There were also calls for limits to be put on rent rises and compensation for tenants who were evicted unfairly.
The group called upon the Government to increase investment in new homes to bring down rents and to transform the private rental market into a professional provider of long-term homes.Above: This two-bedroom terraced home, with an enclosed garden, is for sale for £150,000 in a quiet road in Newport, the Isle of Wight
Top 3 takeaways
- The number of pensioners renting a home looks set to triple to nearly 1 million by 2035
- About 370,000 people aged over 65 currently live in private rental accommodation
- The huge increase in older renters is being driven by the difficulties people face getting mortgages with terms that go beyond their working life
You might also be interested in...
- Landlords hit with tougher mortgage regulations
- How Britain sees the rental market
- Rents to increase quicker than house prices
- Mortgage tips for home buyers