Landlords should consider adapting their properties to suit older generations, as research shows more and more are turning their backs on home ownership and moving into rentals. A survey from Prudential revealed 42 per cent of retired renters used to own a property but are moving into rentals for financial reasons. With 25 per cent of retirees already renting, significant opportunities abound in the sector.
Some 40 per cent of the older generation are selling their homes to pay off debts, while 19 per cent needed to release funds to cover the cost of divorce or separation. Nine per cent sold their home so they could use the money to boost retirement incomes. Stan Russell, a retirement expert at Prudential, said: "Renting in retirement can make financial sense and accessing property wealth to boost retirement income is a genuine solution for many. Our research shows that many retired renters are perfectly happy with this arrangement."
However, retirees are warned that renting can also create a financial burden, as rents can be higher than mortgage payments. "I would urge everyone in the run up to retirement to speak with a financial adviser to help them plan and save for the income they'll need to cover their costs when they stop working," Mr Russell said. The average monthly rent costs GBP 423 - two-thirds more than the average for a mortgage repayment for retirees.
For landlords, the high number of people switching to rental accommodation is good news and with demand increasing, rents will get higher. According to Prudential, for someone retiring in 2013, the average cost of renting will be GBP 5,100 each year. What's more, 73 per cent of retirees surveyed by the company claim they plan on renting for the foreseeable future. This means there are opportunities for extending rental arrangements and an increased likelihood of improved stability. With 15 per cent of older generation renters choosing to do so as a lifestyle choice, there is also a chance more people will opt for rental accommodation in the future.
- Tuesday 06 August 2013