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By Richard Rowntree

Managing Director, Paragon Bank

OTHER FEATURES

Private Renting is No Longer for Just the Young

There are many misconceptions about the private rented sector, but a common one I hear is that it is the tenure of the young. 

This is outdated and doesn’t reflect the demographic changes we have seen over the past 10 to 15 years.  

Over half of tenants today are over the age of 35 and, if current trends continue, the average age of tenants living in the sector will only rise. 

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The demographic of tenants that have experienced the fastest growth over the past 10 years is those aged between 45 and 64 – increasing by 70 per cent. Government data shows there are 1.18 million households where the lead household representative is within the 45-64 bracket, compared to 691,000 in 2011.

This is a cohort of renters that have lived in the tenure for the long term and who look set to call the PRS a home for life. 

We commissioned research of over 2,000 tenants to gather their views on renting and home ownership aspirations. Our new report – The Middle-aged Tenant Squeeze – shows that less than one in five of this age group is currently saving towards a deposit for their own home, even though the desire to own a home is much higher. 

Compared to younger age groups, the 45-64 cohort typically has a lower income, is in less skilled jobs, and sits within lower social grades, inhibiting their ability to buy a home. These tenants have lived in rented homes for the long term and look set to continue to do so; they view the home as their own and they want the security that their landlord won’t sell the home. 

This brings me back to a regular theme of this column – Government policy. 

Much housing policy is targeted at first-time buyers and focused on the younger ‘Generation Rent’ group of tenants. There seems less consideration for those who will call the PRS home for life, those who need committed landlords who continue to invest in the sector.  As long-term tenants age, they will want to stay in the area where they have a good support network. Without incentivising landlords to buy, hold and upgrade rental property, the Government risks reducing the supply of homes for this demographic to rent.

In addition, the Government needs to consider the implications of this group living in the PRS past 65 and the likely cost of such a change. As social housing supply is squeezed, the PRS will remain the home for many.

Looking at the group of over-65s currently living in rented accommodation, the ageing of this cohort past retirement age could have broad implications for the PRS, as well as present opportunities for landlords to provide these tenants with a home. 

As with other distinct tenant groups – young couples and students to name but two – older tenants have their specific requirements. Over 65s are more likely to live alone and in smaller homes, for example, and the sector will need to adapt and evolve to cater to this ageing tenant population. 

Landlords will need to target smaller homes and be prepared for their tenants to adapt the home to suit their needs.

The good news is that landlords have a strong track record of meeting the needs of their tenants and I’m confident that they will be ready to respond to meet this changing demographic.

* Richard Rowntree is Managing Director for Mortgages, Paragon Bank *

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    Renting to the elderly in the PRS is a disaster, there is not the security of tenure that would be needed, finding a s21 on your mat at 21 years old is not welcome, finding the same thing at 81 is a nightmare. This will blow up.

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    I couldn't agree with you more, Simon.

     
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    Why would you want to evict them?
    If the property is affordable and conveniently located the likelihood is you will have an excellent low maintenance tenancy for many, many years.

     
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    It is quite simple Jo, the private rental sector is not the social housing sector. Many landlords provide short term accommodation for people who want that because they do not want to buy at the moment like young professionals, students etc. We are not in the business of providing permanent homes. We do not see that as our role.

    It is highly irresponsible to let to elderly people or people with families if your business model does not include long-term, indefinite tenancies. If that is your business model, then that is different. Personally I have no intention of handing over my flats on an indefinite basis. If that is the only option then I will sell them.

     
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    I much prefer the mature tenant, in fact I will not rent to anyone under 25, 2nd time rounders, divorcees, people who have sold properties and don't want to buy again, make good tenants

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    Totally agree, my concern is for the welfare of the older tenant when they are evicted.

     
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    A timely article as we are just advertising a couple of HMO rooms and have found that the demographic has changed dramatically even over the past 6 months. Virtually no applications from anyone under 25 and lots for the 35 - 45 bracket. We’re guessing that many mums and dads no longer have a “spare room” and are still cooking, washing, ironing etc for their adult offspring.

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    I have 3 older tenants. All of them had tried to get Social Housing and were told it simply wasn't going to happen in their circumstances in any kind of reasonable timeframe. 2 of them they were people I knew and I bought flats specifically for them. Both were either homeless or on the verge of being homeless. Both flats will fit into the LHA for the foreseeable. That was the whole point of buying them, so they were affordable for as long as the tenant wanted to live there.
    Even though all 3 tenants are still working the day will come when they retire and it would be awful if they couldn't afford to remain in their homes.
    The third one came to me via one if the Local Authority schemes. Again the flat is at the very affordable end of the market.
    In all 3 cases they treat their homes like palaces. They are immaculate. We have the occasional late payment issue (usually when UC payments have been destabilised by changes in work patterns or ill health unexpectedly cuts income) but on the whole they are excellent, low maintenance tenants.
    One of my colleagues has 8 small flats and only rents to elderly ladies. His most recent tenant moved in 18 years ago and his longest term one is over 25 years.

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    Come on now I am not running a Nursing home that’s thousands per month not Regular letting I am not Social Services either. I had 3 such people enquire recently I don’t have a Nurse or a Doctor on the premises, makes me wonder what they have been doing with their lives.
    No need to worry about serving S.21 we won’t have it thanks to the Pleasure of Shelter the non housing non tax paying Organisation. All the talk that has gone on and still no Petition to save Section 21, even RNLA keeps quiet but have plenty of time to add their weight to other Schemes coming as they will be a Beneficiary of such Schemes.

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    People often have a 20 or 30 year period of active later life.
    That period between their 2nd divorce and needing a carer. It's usually the 2nd divorce in their 50s that pushes them into the PRS.

     
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    Because I am a letting Landlord that let on a temporary basis on AST. I don’t provide permanent Homes for anyone.

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    Isn't that just a case of different words?
    At what point does temporary become short term, then long term, then permanent? Does permanent actually exist? Everyone will leave at some point one way or another.
    I seem to remember you saying some of your rents were very low because you had had some tenants a long time and not increased the rent.
    Very few of us routinely evict good tenants. It's nice to know we could if we needed to but in reality most of us either issue a series of fixed term tenancies or roll onto a SPT. So in reality most good tenants have a home for as long as they want it.

     
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    I am with Michael on this one entirely. It is for social housing to provide indefinite tenancies, not the private rental sector. The White Paper is a means of appropriating our property to make it part of the social housing sector. Any sane landlord is going to oppose the loss of control of their property.

     
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    My tenants can stay as long as they like, that could mean up to the time that they move onto care, so long as the rent is paid, I have a divorced lady 66 still working from home, a couple 74 the gent still works part time gardening, painting and decorating, at some point they'll move on to a tenancy in the sky

     
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    Jo, the point is there were Assured Shorthold Tenancies which included Section 21. because they are our Properties and must have Control over them, we are not buying them a Property.
    There was virtually no Private lettings before this law change
    in 1988, that I know to my cost having lived there having been a Landlord since 1978 and fought for 10 years until 1988 when it was introduced with only a handful of other because the lot of you weren’t there with the greatest respect and only for the help of Sir George Young it might not have happened either he knew it was so Disastrous it couldn’t continue.
    I remember the hassle I had back then and the sitting Tenants owner’s got stuck with halving the valve of your Property. Where were the high and mighty Organisation’s now telling us what we should be doing, the Courses we must do, and of Course to be Digital to suck eggs including Landlords Associations that weren’t there even though they didn’t exist but took over some of the smaller ones that did, then Claim their history. It’s too much to go into in a text…..

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    I have been involved with letting since the 1960s and you are entirely right in what you say, Michael.

     
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    Some are now Benefit Landlords more like Social Landlords doing the Council’s job for them at tax payers expense.
    All very happy milking the System, that’s millions you can include 2.9 single Parents as well, they see it as normal the way it should be and entitled to all Benefits. Why ?, you are creating a rubbish Society. God help the tax payers the chicken are coming home to roost.

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    And that is what Shelter and Generation Rent want, too.

     
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    Of Course it is they are calling all the Shots and provide no housing for anyone, if it wasn’t so serious it would be hilarious you could make it up, they have no mandate and all the power. Careful now they have an army of Solicitors and Legal Representatives is it in the region of 50.

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    Andrew my friend that’s fine but we let on AST’s the bases of all Private lettings, obviously virtually none existed before which created the Industry that now exist, needless to say which is why you are happy with your Tenants now getting Market Rents, on the back of which was created by AST & Section 21 otherwise you would be getting a pittance, so we need your support. I remember one guy paying 4 bob a week. No doubt I will be in the sky before many but while I am on the ground I am fighting for fair play.

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    Micheal in Britain it is the prime minister has the power. At the moment he is banking on chucking money at the NHS to avoid awkward scenarios. Write to him pointing out how many votes he will lose with his policies. North of 2million will abstain. He is a kluas Schwab man, WEF, exposed by GB news

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    I think we all need to remember we each have different business models, different tenant preferences, different definitions of fairness and we operate in different areas of the country.
    Those of us who operate in low wage or favoured retirement areas are likely to be more experienced with older tenants. I only have older tenants in properties that are genuinely suitable for old age. Mainly ground floor flats, on a bus route and within walking distance of a doctor's surgery and supermarket.

    A letting business model that works and is appropriate in London is often not the way we do it elsewhere.
    I have a suspicion that SPTs are far more common outside London. In over 25 years as a landlord I have never issued a series of fixed term tenancies to anyone other than students. More to the point no tenant has ever asked for one. Everyone (except students) start on a 6 month AST which then rolls onto a SPT. We are both then free to start termination proceedings at any point. They just need to give a few weeks notice. I would need to go the Section 21 or Section 8 route if I wanted possession. It gives them the ability to accept a new job hundreds of miles away, move in with a new partner, move into a care home, etc at a time that suits them not just at the end of a fixed term tenancy. It's worked well for me for a very long time.

    We all want to retain the ability to regain possession but have different opinions about exactly what would be an acceptable compromise. Some want Section 21 in it's current format and nothing else can be considered. That leaves politicians facing yet another U turn. Personally I would like Section 8 to be improved so all at fault evictions go that route. When it has been established just how few genuinely blameless tenants are evicted then is the time to debate the future of Section 21.

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    Jo, you seem to be running a housing association !

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    Jo. my friend there’s no business model it’s an Assured Shorthold Tenancy or an Assured Tenancy nothing else it’s the law of the land, for any part of the Country.
    Periodic is an Amendment or bolt on to AST in only recent years not at outset.
    AST & Section 21 is the very foundation of all Private lettings or none of you would be Landlords.
    Perhaps you could do a Contract direct with the Council’s, the place seems to be getting full of fee loaders.
    The main reason why the Council’s wants rid of S.21 they have been obstructing it for years telling Tenants to stay put, that’s not how it was meant to be, until a long wait and draw out Court Case, being used by many as their passport to Council housing.

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    I'm getting confused on this one Michael, with the exception of one 90 yr old tenant who was a long standing protected tenant when I purchased the house, at the right price, all of mine are on AST which at the end of the term roll over into a periodic tenancy, I don't consider a pensioner tenant as a benefit cheat, after all like the rest of us we have pre paid our pensions throughout our working lives. I like long standing good tenants and will keep their rent increases as low as possible, new tenancies are priced at full market rents, it works for me in and around Norwich, maybe it wouldn't work in London

     
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    Andrew l wasn’t referring to that generation.

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