Mortgages  

Later-life renters pose pressing problem for policymakers

Later-life renters pose pressing problem for policymakers

An All-Party Parliamentary Group forecasts high levels of homelessness among the elderly and has called for state intervention to provide emergency temporary housing if action is not taken ahead of time.

The group reports that around 75 per cent of people above pension age currently live in their own homes, while only 22 per cent of over-65s live in rented accommodation. 

However, the private rented sector has doubled since 2000. As this new ‘generation rent’ ages, and their chances of buying a home diminish, the number of pensioners living in the sector is set to rise dramatically. The number of households headed by someone aged 64 or above is expected to treble over the next 30 years, from the current 450,000 to 1.5m in 2046.

Pros and cons

Around a quarter of privately rented properties are categorised as ‘non-decent’ – that is, in poor condition – and these properties are disproportionately occupied by older people. Lack of security of tenure can be a source of stress for elderly people, too. 

Rent levels in the private sector, which may be affordable when a tenant is working, may be too expensive once they are retired and drawing their pension. Even where they qualify for housing benefit, there may be too large a gap between the rent and the benefit.

The APPG argues that appropriate housing can lead to better health outcomes for the elderly, thereby reducing costs to the health and social care systems. It quotes research from Savills calculating that the cost saving to the state of specialist retirement property is between £24,700 and £41,100, largely through reducing falls and allowing hospital patients to be discharged to appropriate housing more quickly.

It concludes that the private rented sector is “not best placed to meet the needs of renters who move into older age”. 

The social rented sector is likely to be much more suitable: there are fewer non-decent properties, there is longer security of tenure, adaptations are more likely to happen, and rents are generally at lower levels. However, it notes: “At present there is little sign of the provision of a much enlarged social housing sector geared to the needs of older people.”

Age friendly

The report estimates that three-quarters of pensioners currently live in their own homes, but expects to see a huge increase in demand for “age-friendly” rental accommodation for the large numbers of older people who will then be in the rented space.

Assuming rents grow in line with earnings, it estimates around half of these older households in the private rented sector will no longer be able to afford the rent they could manage before they retired. It calculates that the average private rented accommodation would cost up to 46 per cent of the mean pensioner’s income, and that around 630,000 private rented households aged 65 and over will need lower-cost rented accommodation within 30 years. This would require the building of 21,000 suitable homes every year. 

Table 1 shows estimates of the proportion of older people renting privately who will be devoting more than 33 per cent of income to their rent.