Recent statistics published by the Office of National Statistics show that there are 267,704 private rented households in the UK that are occupied by people aged 65+ – that’s 4.39% of OAPs living in private rented property.
This got me thinking two things:
1. How many of these OAPs have always rented?
2. How many have sold up and become a tenant?
In retirement, selling up could of course make financial sense to the mature generation in Rotherham. It potentially allows them to liquidate the equity of their main home to enhance their retirement income.
I wanted to know why these older people rent and whether there was opportunity for the buy-to-let landlords of Rotherham?
The Prudential published a survey recently that said nearly six out of ten OAP renters had never owned a home. 20% OAP renters were required to sell up because of debt and only one in ten OAP renters sold their property to use the money to fund their retirement. (The remaining 10% of OAP renters were renting for other reasons.)
Life expectancy is making it important to fund retirement.
For someone living in Rotherham who is aged 65, the current life expectancy is 18 years for a man and 20.1 years for a woman (interesting when compared to the national average of 18.7 years and 21.1 years). Funding retirement is therefore increasingly important.
The burdens of financing a long retirement are being felt by many mature people of Rotherham. The state of play is not helped by rising living costs and ultra-low interest rates reducing returns for savers.
So, what of Rotherham?
Of the 12,660 households in Rotherham, whose head of the household is 65 or over, not surprisingly 7,892 of households were owned (62.34%) and 3,795 (29.98%) were in social housing. However, the figure that fascinated me was the 526 (4.15%) households that were in privately rented properties.
Talking to members of my team at Bricknells Rentals and Fenton Board, as well as other Rotherham property professionals, it seems that this figure is rising. This is only anecdotal evidence but I’m convinced that more and more OAPs are selling their large Rotherham homes and renting something more manageable.
Why is renting a good option for OAPs?
Selling a large home and moving into the rental market allows OAPs to release all of their equity from their old home. This equity can be gifted to grandchildren (allowing them to get on the property ladder), invest in plans that produce a decent income and all the while living the retired life that they want to live.
These Rotherham OAP renters know they have a fixed monthly expenditure and can budget accordingly with the peace of mind that their property maintenance and the upkeep of the buildings are included in the rent. Many landlords will also include gardening in the rent!
Renting is also more adaptable to the trials of being an OAP – the capability to move at short notice can be convenient for those moving into nursing homes, and it doesn’t leave family members panicking to sell the property to fund care-home fees.
Rotherham landlords should seriously consider low maintenance semi-detached bungalows on decent bus routes and close to doctor’s surgeries as a potential investment strategy to broaden their portfolio. Get it right and you will have a wonderful tenant, who if the property offers everything a mature tenant wants and needs, will pay top dollar in rent!
Landlords, do you need more tips? Get in touch with me – I’d be happy to help.