Wednesday 14 June 2017

Retirees spend a record £3.7bn paying rent

Countrywide’s Monthly Letting Index published today, shows that retirees in Great Britain are becoming a larger part of the rental market. Over the last 12 months people who have retired paid a total of £3.7bn in rent, up 216% from the £1.2bn they paid in 2007 (table 1). This increase means that £1 in every £14 (or 7.3%) paid by tenants in Great Britain now comes from a pensioner (table 1). The total amount of rent paid by private tenants in Great Britain over the last 12 months stood at £50.6bn.

In 2017 pensioners paid an average of £810 a month, up 0.3% on last year and 19% since 2007. Yet the average retiree paid 12% less than the typical tenant, because they were more likely to rent a smaller home. Three-quarters (75%) chose to rent a one or two bedroom home compared with two thirds (66%) of all tenants. Retirees also make up a greater proportion of tenants in the places where rents are lowest.

Retired people now account for 8.0% of all tenants, compared with 5.2% in 2007 (table 2). The largest proportion is in Wales, where nearly 1 in 5 (18%) of tenants are retired (table 2). The South West (13.0%) and the North East (10.1%) have the second and third largest proportion of retired tenants respectively. London, where just 3.5% of tenants are retired, has the fewest (table 2). Across Great Britain as a whole 53% of tenant pensioners live alone and 81% are over the age of 65.

In May rental growth showed no signs of picking up, with the cost of renting a home just 0.1% higher than it was in May 2016 (table 3). Rents in the capital fell for the seventh consecutive month although at a slower rate than in April (-1.5% compared to -3.4%). The South East, Northern England, Scotland and Wales all saw rents fall, leaving them lower than at the same time last year (table 3). 

Commenting, on the findings, Johnny Morris, Research Director at Countrywide, said:

“The rental market can no longer be typified by the image of carefree, young professionals.  More than half of tenants are over 30 and the number of pensioners renting has reached record levels.  And with younger generations growing up much less likely to be homeowners, tenants are getting older with an ever more diverse group of people calling the rented sector home.

Seven consecutive months of falling rents in the capital are starting to show signs of rippling out across the country with rents down in over half of regions outside London. The number of homes on the market remains well up on last years’ levels, softening rental growth.”

<Insert - Table 1 – Total annual rent paid by pensioners>

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