When we think of the generational split, we often assume that millennials are stuck in a renting rut and the older generations are well settled on the property ladder. However, it is now more common than ever for the over 50s to throw off the shackles of a mortgage and return to tenancy.
Recent research by Hamptons International found that 15 per cent of rental properties in the North East are occupied by over 50s, the same as the national average. The same study estimates that, in 2019, 791,580 homes in Great Britain are rented by people aged 50 plus, which is 61 per cent higher than just seven years ago.
This increase in older renters does not necessarily mean that people in this age bracket aren’t still buying property. Some are choosing to rent out their existing home once, say, the kids have flown the nest, and are downsizing to something a little more manageable. In the past, they may have chosen to sell up and buy smaller or purchase a second home, however many people are choosing to hang on to the larger property for inheritance purposes or as a retirement plan.
Part of this change in preference between buying and renting could be due to an increase in stamp duty on second homes from 2014, with the taxes rising from seven per cent to 12 percent on the most expensive properties, and then an additional three percent being added in 2016. This means that more pricey houses could incur a 15 per cent stamp duty.
Another reason for later life rentals could be due to changes in circumstances, such as a divorce or relocating due to a job, and a person over 50 making such a change may not want to take out a mortgage later in life. In these circumstances, renting can be seen as a short-term solution while getting used to a new situation, or, in some cases, a long-term solution.
I spoke to Carly Payne at Residential Lettings Director at GSC Grays, who said: “Between 2014 and 2019 we witnessed a 100 per cent increase in the 51 to 60-year-old age bracket moving into rental.
“As we would expect, 2- and 3-bedroom bungalows rent quickly, however, what’s interesting is the number of over-50s choosing larger 4 and 5 bedroom houses. This is most commonly to provide space for adult children and grandchildren for both short-term and long-term family visits.
“At GSC Grays, we’ve noticed a particular trend towards renting when mature sellers come to move on from the family home as they don’t want to go through the buying process again and it gives them far greater flexibility and less responsibility for maintaining a property.
“The over-50 renter is more discerning on the features of a property but in our experience, they are more likely to stay long-term which is obviously a preferred outcome for a landlord. This does, however, mean there is often a lack of suitable properties on the market and we would encourage a potential landlord to consider the opportunities of the over-50 rental market in the North East area.”
Please note: This article is intended as guidance only. No responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by Latimer Hinks. In addition, no responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by the firm.