by Mark Johnston
A Surge in Pensioners Who Are Now Renting!
Renting a property was previously a choice for the younger generation as they saved for a few years to get on the housing ladder. However, there is currently a demographic change in the UK rental market with people in retirement now are now also renting.
Recent figures from lettings agency Countrywide reveals a significant increase in the number of tenants aged over 50 living in private rented accommodation.
Data from Prudential, an international financial services company, reveal that more retirees than ever are making up the rental market. Tenants aged 41 and over now equate to 29 per cent of all of those renting a property and it seems that this figure is likely to rise in the future.
Research has shown that an increasing number of retirees are now choosing to place their property up for sale and turn to the rental market instead.
Over two fifthsof retiree renters are former homeowners who have decided to sell.
A current survey showed that around 40 per cent of the survey’s respondents have sold their home to pay off debts; meanwhile,19 per cent wanted to release funds to pay the expenses of a separation or divorce, whilst one tenth are actually using their property sale to boost their retirement income.
So it seems that many struggling pensioners are now being forced to selling their homes and moving to rented accommodation to pay off debts.
Some experts feel that the fact that some retirees say they are being forced to sell up purely by the need to pay off debts is concerning and suggests they are not receiving professional advice.
One problem is that more than 1.6 million retired people still have a mortgage. However, their biggest problem often is not meeting the monthly repayment, it is finding a bank or building society that will lend to them.
Fears have also recently been raised for people in the later stages of their working lives who are sitting on an interest only mortgage ‘time bomb’. This could mean that many may be forced to sell their homes if they do not have a proper plan in place to pay their loans back once the deal comes to an end.
Another problem that many people who have recently retirement face is the pensions crisis, the collapse of annuities, and also the shocking returns on savings this have left many more people needing to unlock equity in their properties and find a smaller, cheaper home.
Therefore, Prudential’s senior pensions business development manager, Stan Russell, said: “Renting in retirement can make financial sense and accessing property wealth to boost retirement income is a genuine solution for many.”
Analysis of rental prices found that retired renters pay £423 a month in rent typically, compared with £257 a month on average for retirees who still have mortgages.
However, previous research has found that people retiring this year expect to have an income of around £15,300 a year, meaning average rental costs would take up around one third of this sum at just over £5,000.
Story link - A Surge in Pensioners Who Are Now Renting!
Related stories to : A Surge in Pensioners Who Are Now Renting!