Middle-aged tenants balloon in numbers

Many in this age group will remain in rented homes for the long term too, research suggests

Middle-aged tenants balloon in numbers

In a span of 10 years, the number of middle-aged households privately renting has nearly doubled, with many likely to remain in rented homes for longer due to several factors inhibiting them from purchasing a home of their own, according to Paragon Bank.

The buy-to-let lender’s analysis of government data revealed that the number of households in England where the lead reference person is aged between 45 and 64 years has increased from 691,000 in 2011 to 1.18 million in 2021, representing a 70% increase.

The age group experienced the greatest growth in the number of households in the private rented sector over the period. The number of households aged 65 and over who are privately renting increased by 38%, while those aged between 34 and 44 rose by 21%. The 16- to 34-year-old group increased by just 3%.

Meanwhile, the lender’s own survey of over 2,000 tenants showed that while the desire to own a home is high among the 45 to 64 age group, the ability to buy is inhibited among these tenants.

Paragon said nearly half of this age group (47%) has a desire to buy their own home, yet only 19% are actively saving towards buying a property. Of the 19% actively saving to purchase a home, 25% have their finances in place and are searching, with 4% in the process of purchasing. The remaining majority (71%) are in the savings phase.

Another issue facing this group, based on the results of the survey, is income. Just 14% of those in the 45 to 64 age bracket have an annual income in excess of £50,000, with a quarter earning less than £10,000 per year and a similar proportion earning between £30,000 and £50,000, inhibiting the ability of tenants in this bracket to save for a deposit and limiting their ability to obtain and service a mortgage.

The lender also noted that tenants aged 45 or over have been renting for longer, lived in more properties, and tend to stay longer in the same home than those in the younger age brackets. They are also more likely to live alone when compared to the younger groups.  

Over a fifth of those aged between 45 and 64 (22%) have lived in privately rented accommodation for more than 15 years, with a further 17% in the sector for between 11 and 15 years. Those under 45 typically have spent less time in rented homes, with nearly seven in 10 living in the sector for less than five years.

Just under a quarter of over-45s (23%) have lived in their current rental home for more than 10 years, with 22% living in the same home for between five and 10 years, suggesting that older tenants view their rental home as long-term accommodation.

“There is a perception that the private rented sector is home to the young when, in fact, over half of tenants are aged over 35 and the greatest increase in the number of households is in the middle-aged 45- to 64-age bracket,” Richard Rowntree (pictured), managing director of mortgages at Paragon Bank, said.

“Too much policy focus is on getting younger tenants on the housing ladder. While this is important, the government should also consider the need to provide a home to older tenants who live in the private rented sector for the long-term.”

Rowntree noted that as only a fifth of 45-64-year-olds are actively saving towards buying a house, middle-aged tenants will likely remain in rented accommodation for the long-term.

“This has implications for the types of property that this group will live in as they age,” he said. “For example, there may need to be an increase in one or two-bedroom properties, and landlords will need to be open to property adaptions. Ensuring there is a supply of property in the private rented sector to cater for their needs is vital.”