Renting in retirement is becoming more common and specialist firms are filling a gap in the market. Sharon Dale reports.
Renting is a growing trend thanks mainly to younger people who are either priced out of home ownership or spend longer saving for a deposit.
But Millennials could soon find themselves competing for a rental home with the over 60s. The number of people renting in retirement is on the rise.
Those aged over 60 in private rented accommodation has shot up from 254,000 in 2007 to 414,000 in 2017, according to the Centre for Ageing Better. The CAB believes that by 2040, a third of people over 60 could be renting.
For a growing number of retirees it is a lifestyle choice rather than “needs must” and property maintenance is cited as one of the main reasons for selling up and renting. When you rent, the landlord takes on responsibility for fixing or replacing roofs and boilers and all other repairs.
Other factors influencing a later life shift to the rental sector include more relationship break-ups, which force the sale of a home; loneliness; a struggle to find a suitable home to downsize into; the need to be close to family and releasing equity to help children and grandchildren onto the property ladder.
The advantages of renting include flexibility as it is easier and quicker to move if you are a tenant.
The main disadvantage with renting from a buy-to-let landlord is security of tenure. Most tenancy agreements are for either six months or a year, after which they can be terminated
Renting in a retirement complex or in one of the growing number of build to rent schemes should prove safer as these companies are in it for the long-term and rental income forms the basis of their business models. Some over 55s developments offer an assured, long-term tenancy. However, bear in mind that the rent could rise.
You may also have to compromise on space, especially if you are renting in a retirement complex, though downsizing your belongings can prove helpful.
Wealthier retirees who own higher value homes may also want to consider inheritance tax implications before selling to rent as a money tied up in a main residence qualifies for inheritance tax relief.
Girlings Retirement Rentals is the UK’s largest provider of retirement rental properties with 2,700 apartments in purpose-built developments.
Its chief executive Gillian Girling says: “We are noticing more people choosing to downsize and rent in a purpose-built retirement development, rather than buy. It’s something we believe will become increasingly common in the future.”
She adds: “Retirement developments offer communal facilities including lounges, gardens and a laundry where residents can meet. Most developments organise regular activities such as fish and chip suppers, coffee mornings, events and outings.
“Having a ready-made social life on the doorstep can be a huge benefit for people in later life.”
Girlings has a number of properties to let in Yorkshire including one-bedroom apartments at its All Saints Court development in Market Weighton. The development is for over 55s and rents start at £525 per calendar month. The service charge is included in the rent. Girlings also accept tenants who claim housing benefit.
All Saints Court has a lift, communal lounge, a 24 hour care line, manager, laundry room and a guest suite.
Keith and Teresa Davy are in their 70s and have been renting a retirement apartment through Girlings for the past year.
The couple previously owned a retirement flat but were keen to move to a different area and to fulfil their travel ambitions so they sold their property for £55,000 to free up capital.
Their rental apartment was available on an assured tenancy which gave the Davys confidence that they could stay in the property for life if they chose.
The couple also have the advantage of often being able to book a stay in a guest room in other Girlings developments for £25 a night, which is cheaper than a hotel.
They say that security is another benefit as they holiday for up to six weeks at a time without worrying about their home thanks to a site manager.
Keith adds: “We couldn’t afford to buy the flat we’re living in so renting has enabled us to live in an area we really like. We also like the security of having an assured tenancy and if I was to die first I’m confident there are people here who would keep an eye on Teresa, so she wouldn’t be alone. I find that very reassuring.”
For developers, there appears to be an investment opportunity in both retirement sales and rentals.
Knight Frank’s “The Case for Retirement Living” report says that by 2050 one in four people in the UK will be aged 65 or over. The retirement housing sector only has 725,000 homes, which is just 2.6 per cent of the UK’s total
Gillian Girling says: “The demand for retirement housing will be enormous over the next few decades.”