The rise of the over-50s renter
Generation Renters are usually characterised by millennials who are unable to purchase a home and are stuck in the rental market. However, this term doesn’t just apply to people in their 20s as growing numbers of over-50s are renting too.
The number of older renters has reached record levels across Great Britain, with over-50s now accounting for more than one in 10 rented households. So far this year over-50s made up 15% of rented households, up from just 11% when our records began in 2012. Nearly a third of this group are pensioners.
We estimate that this year over-50s rented 791,580 homes in Great Britain, 61% more than in 2012 and 8.2% more than last year. As a result, over-50s will pay £9.2 billion on rent this year, up from just £5.1 billion in 2012. This means that £1 in every £7 paid by tenants in Great Britain now comes from a tenant aged over 50, compared to £1 in every £9 spent in 2012.
Number and % of rented households over 50 - Great Britain
Source: Hamptons International & EHS
The South East has the highest proportion of older renters, where nearly one in five (19%) tenants are over 50. The South West (16%), North West (16%) and Wales (15%) follow. Meanwhile, the East of England, London and Yorkshire and Humber (11%) have the lowest proportion of tenants over 50.
During the last 12 months the average tenant over 50 paid £1,000pcm in rent, 3% more than other tenants in Great Britain. Most tenants over 50 live in two-bedroom properties, with 26% choosing a three-bedroom property and 19% living in a one-bedroom home. However, across Great Britain 48% of tenants over 50 live alone.
So why have we seen this shift? Older tenants might be renting for many reasons. In some cases, they simply can’t afford home ownership. But for those who do own a home, renting enables them to free up cash for retirement or to pass down to younger generations. And for some it’s the sheer convenience of renting over owning.
Furthermore, some of these older renters don’t consider upsizing a worthy investment. With sluggish price growth and the cost of moving so high, more households are choosing to rent rather than spend their money on stamp duty and conveyancing fees. This is particularly true during times when house prices aren’t rising quickly because it becomes more difficult to recoup moving costs.
Is this trend set to continue? Put simply, yes. The affordability problem isn’t going to disappear anytime soon. So with more people set to rent for longer, tenants are going to continue getting older.
Rental Growth on New Lets
Rising rents in the South are driving rental growth in Great Britain. The average cost of a new let in Great Britain rose to £977 pcm, a 2.6% year-on-year increase. The South West recorded the strongest rental growth, with rents rising 4.0% year-on-year. Meanwhile rents in Greater London increased 3.1% year-on-year, however this is compared with a short period of weak average rents back in May 2018. Wales and the East were the only regions to record small rent falls.
Source: Hamptons International