The property market is fast changing and dynamic .... now more than ever before. So one of the things that investors, landlords and agents need to try and do is to look into the future as much as possible. In other words, look for upcoming trends and try to capitalise on them before they actually happen. Not after, once it is too late.
One trend that many property experts have noticed in recent years is for more mature and retired people to want to rent a home. This seems to be reversing the trends in previous years for tenants to be mostly young people, young professionals or families.
A recent survey tends to support the trend towards more retiree renters: The Growth Of Later Life Tenants
by Paragon Bank reports official Government figures showing that over 55s are the fastest growing tenant type in the private rented sector. It says the number of 55-64 year olds with an assured tenancy has risen by a massive 118% since the turn of the last decade. Numbers of those aged over 65 have grown 93%. It says that this rate of growth is nearly double the rate of the next fastest growing age group (34-44).
What are the reasons for the growth in the retiree renter market?
An obvious reason is that people are living longer. Interestingly though, older people are more active than in the past. Older people increasingly want to live independently in their own homes rather than consider supported accommodation or care.
This market is also likely to be growing for financial reasons. High property prices mean that older people who did not buy a property when they were younger are unlikely to be able to afford to buy now.
There is another aspect to the financial element too: Retirees today are likely to consider the option of spending their money now while they are still able to – rather than keeping their money within their house, which may have to be sold to pay care home fees at some point. It’s not unusual to find older people selling a house they own outright to release cash and then moving into a rented property. (Something that’s also known as spending the kids’ inheritance!)
Another very significant reason for older people to rent is that it is just easier. They don’t have to take on a big commitment, worry about maintenance, or possible future large maintenance bills.
Let’s look at a few of the reasons why you should accept (and even favour) retired and older tenants in a property:
Older people tend to make good tenants. They tend to look after your property (and rarely have wild parties!). They may have a regular, reliable income from their state pension and maybe a private pension too. One benefit of retired tenants for landlords and investors is that they tend to stay long term. Many may plan on staying indefinitely.
What should landlords, investors and agents do to ensure that they make the most of this large and expanding area of the letting market?
Paragon say that by 2043 the proportion of the UK population aged over 55 will increase from 30% to 36%, or 6 million more people. Yet their research says that only 20% of landlords actually expect to let to retirees, suggesting that 80% are missing out on what is a growing market. So here we’ll look at what landlords, agents and investors can do to capitalise on this market.
* Firstly, embrace the market. Don’t be surprised if older or even elderly people enquire about your properties. This is a market worth taking seriously.
* Actively target the retiree market in your advertising and marketing. Many older people are avid users of the Internet and social media. They just use it differently compared to teenagers for example.
* Look at where your tenancy procedures may need to be adapted. Retirees won’t necessarily have an employment income (though some will) or employment references etc. They might fail standard tenant checks but still make good quality tenants.
* When investing in new property, choose areas that might appeal to retirees. They won’t be interested in schools or commuter links for example – a positive here is that areas out of good school catchments and without easy commuter links are often cheaper property areas to buy in. But they will look for good local amenities and possibly areas that already have a strong retiree community.
* Choose properties that will suit retired tenants. It’s something of a stereotype that bungalows and apartments will be more suitable, but probably an accurate one. These tenants will almost certainly be just a single or couple so will favour smaller properties too.
* Be prepared to consider adapting properties so that they cater for older tenants better. For example with step free access and accessible bathrooms. You may be able to get grant aid, such as Disabled Facilities Grants, to meet the cost of this in some cases.
* Be more flexible about allowing older tenants to personalise their property. For example with their own choice of decoration or making changes in the garden. As older tenants may well stay long term this is less likely to be a problem than with other tenants.
Indeed, ensuring that you and your properties are retiree-friendly in every way can keep your properties occupied by what can be the ideal tenants for years and years into the future.