Renting in retirement, the new normal?

Many older people are now discovering the benefits of renting property, rather than owning their homes outright.

By Dee Pilgrim

The majority of older people in England are currently owner occupiers, but figures from the English Housing Survey 2016 – 2017 1 show that almost 1.5 million people over the age of 65 are renting, reflecting a long-term trend. 

Of these, 414,000 are renting privately, a jump from 254,000 in 2007 – supporting estimates that suggest that by 2040 a third of those aged over 60 could be living in private rented accommodation. 

Reasons to rent

So why rent rather than buy? A new survey from property consultancy Knight Knox 2 polling 2,000 UK renters showed the main reason was affordability. Thirty-five per cent of respondents aged 55 years old said that renting suited their lifestyle. They were also the most likely to say that they didn't want the commitment of maintaining a property and paying a mortgage.

Andy Phillips, commercial director at Knight Knox, said: "Whereas renting has previously been seen as something for the younger generations, increasingly this is not the case. The average age of renters is going up as more older people enter the sector.

"It is clear that the rental sector is becoming more attractive on a long-term basis for people of all age groups thanks to the flexibility on offer, and we expect this trend to go on as the market continues to improve. This diversification is good for the sector and highlights how renting is becoming the norm for many."

Top tips for renting

Once you've made the decision to rent, there are a few things you can do to make the process easier. For a start, you need to decide how much you can afford to pay in rent each month and see whether there are properties in that rental bracket in the area you want to live.

Find out if the letting agents belong to an industry body such as the ARLA Propertymark (formally the Association of Residential Lettings Agents) or the National Approved Letting Scheme (NALS) and ask as many questions as possible about all the charges you may incur renting the property. Read the tenancy agreement very carefully before signing and keep asking questions if you are unsure about anything.

Girlings is a specialist retirement property letting agent, with more than 2,700 properties in over 600 developments. Jamie Turnbull is its Business Director and says: "When people consider downsizing they often think the only option is to buy, as they've always been home owners. But we're finding more retirees are realising that renting can be a great alternative, without the hidden fees or complex contracts that can come with buying in a retirement village.

"Often when people rent they can plan their finances more carefully as they know what their monthly outgoings will be, plus there are no surprise bills, which can crop up for upkeep and maintenance when people own their home. Renting saves on stamp duty costs too, which can be significant in some parts of the country.

"The main barrier to renting in our experience is security of tenure. However with most of our properties coming with assured or ‘lifetime' tenancies this doesn't need to be an issue. Knowing they can have an assured tenancy is often the turning point for people when considering renting and it suddenly becomes a viable option. People don't want to keep moving when they are older and so assured tenancies are a big plus for many people.

"Renting enables people to downsize to a more manageable sized property, release capital, save on bills and enjoy additional benefits such as access to a ready-made community and services they may need when they are older. They can then just get on with enjoying their retirement."

Rachael Docking, the Senior Programmes Manager, Centre for Ageing Better, adds: "People in later life have a diversity of needs and desires when it comes to housing, which means it's important that there are a range of suitable housing options available – including the private rented sector. We need to see longer-term tenancies to give people the security they need in later life, as well as more support for tenants and landlords to make the repairs and adaptations needed to keep people safe and healthy in their home."

Long-term tenants

From the landlord's perspective, retired people make good, reliable tenants because they tend to want to stay in the property long-term and so look after it.

Meera Chindooroy, Policy and Public Affairs Manager at the National Landlords Association (NLA), says older renters should feel confident in expressing their intent to stay, and in being open and clear about their needs, so that they get the right match with a landlord.

"As with all other tenants, older renters should ensure they raise any issues or concerns with their landlord as soon as possible," she says. "If they face mobility issues, then they and their landlord should look at applying for a Disabled Facilities Grant from their local council to ensure the property is adapted to their needs."

The Tenant Fees Act 

Unexpected fees and high deposits can make properties harder for people to afford and are often not clearly explained upfront. The Tenant Fees Act, which came into force on 1 June this year, caps the tenancy deposits that renters pay at the start of their tenancy at the equivalent of five weeks' rent. It is expected to save tenants across England at least £240 million a year, or up to £70 per household. 

A new lease of life

Diana Carteur is a 65 year old former vocational ballet school principal, who has found her move to one of Girlings' retirement developments in Weymouth life-changing.

She had lived on the Greek island of Lesvos for nine years where she owned her own property, but returned to the UK in 2013 due to ill health and the Greek financial crisis. 

At first, Diana spent some time in a council flat in London but was very unhappy there and so she decided to move to Weymouth, where her family was from and where she had lived when her children were small. 

In November 2017, Diana travelled to Weymouth to find a flat and discovered Girlings had one available in Jenner Court. Diana really liked the development and the area. 'I talked to the team at Girlings about my situation and they helped me calculate how much housing benefit I would be entitled to and if I would be able to afford the apartment,' she explains. 'The clincher was that Girlings could offer me an assured tenancy, meaning I would be able to stay in my new home for as long as I like.' 

She moved into Jenner Court in December 2017 and her health and wellbeing have both improved since the move. Her blood pressure had risen to dangerously high levels during her time in London, but it has now returned to normal. Commenting on her move, Diana says: "My life, which had been miserable in London, is now back on track and I know I will be happy here."