Meeting the challenge of older renters
In recent years, landlords and letting agencies have been heavily focused on young people, and for good reasons, with demand for rental accommodation rising sharply among millennials.
This situation has come about through a couple of key factors; firstly, the expansion of university education starting in the early 1990s has increased the need for student accommodation, with this market expanding in established university towns and starting from scratch in towns and cities where new institutions have been created.
Secondly, the well-documented problems of affordability and supply that have prevented millions from getting on the housing ladder in their 20s as their parents might have done has led to this demographic being dubbed 'generation rent'.
Not just a millennial issue
However, the problems of getting on the housing ladder are not confined to the millennials and, of course, if today's young people cannot ever get on the housing ladder, they will eventually be the middle-aged and subsequently elderly renters in decades to come.
This presents a challenge for landlords and letting agents, both in their marketing - since the demographics will gradually shift as the millennials age - and also issues like affordability. How, it might be asked, could pensioners who may not have had significant savings or large pay packets from which to take a percentage towards an auto-enrolled pension meet the cost of renting in retirement? After all, those with the least means to save now will by definition be the least likely to be able to buy.
The RLA calls for change
Such concerns are the focus of a new campaign by the Residential Landlords' Association (RLA), following a recent BBC report showing middle-aged renting is already rising rapidly, with the number of tenants aged between 35 and 54 doubling in the past decade. The study also found that, as with all age groups, more people in this demographic will rent privately than from the state, while there has been a particularly notable rise of renters aged 45-50, often as a result of calamities like death, debt or divorce.
This makes the case for longer tenancies more powerful, according to RLA policy director David Smith.
He said: “With government data showing that rents are increasing by less than inflation and that average weekly rents are lower than weekly mortgage payments, it is not surprising that more older people who are finding it difficult to afford to buy a property are now renting.
“We recognise that older tenants, especially those with children, want security in rented housing.
“Although official statistics show that tenants have, on average, lived in their existing rented homes for almost four years, we have called on the government to do more to support the provision of longer tenancies."
Mr Smith noted that mortgage lenders often refuse to let landlords offer longer tenancies, something he said the government should address. Moreover, he added, the supply of rental property is becoming restricted as tax changes have encouraged more landlords to sell homes off.
He concluded: “The government is increasingly asking the private rented sector to house people in categories that it was never intended or structured to do.
“Ministers need to undertake a comprehensive review to ensure the support is in place for landlords to meet the changes in the types of tenants in rented housing."
A demographic time-bomb
Indeed, the issue may be more of a demographic time-bomb than some appreciate. This week, financial services firm Royal London published a report titled 'Will we ever summit the Pensions Mountain '' This is designed to answer the question of how large a pension pot people will need to live comfortably in retirement.
On average, it said, the pension pot will need to be around £260,000. But that is based on the assumption that certain costs will no longer have to be met, such as paying for a mortgage. For renters who still have housing costs to address, the projected figure soars. Royal London estimates that for younger generations it could be as high as £445,000. This could prove a huge challenge for tenants, landlords and letting agencies alike.