The demographics of the UK rental sector are changing, and landlords could benefit from adapting to a new category of renters to maximise their appeal.
When most people think of the typical tenant, they might think of someone in their early 20s, potentially living with friends or as a couple for the first time, often with a lower than average income. While this tenant type remains predominant in the UK, there is also a wide array of other renters seeking homes.
People rent for a variety of reasons, but the most common one is affordability – people in the UK are often tenants before they become homeowners. This can also allow greater flexibility as young professionals pursue their careers, often living in more central locations close to jobs and amenities.
But as has been widely reported for several years, people are getting onto the housing ladder later than they used to, and this has not only led to more people renting in their early 30s, but also to much older renters remaining in the market rather than owning a home.
Increases across most age brackets
Increasingly, the private rented sector has become an essential option for much older renters. In fact, new research from The Mortgage Works has revealed that the number of 55-64-year-old tenants in England has surged by more than 80% over the 10-year period from 2013 to 2023.
This comes as, at the opposite end of the scale, the number of tenants aged 25-34 actually fell slightly, by 4%, which could be down to the rise in the number of young people living at home for longer to save money.
A slightly younger category renters have also grown in number, with the 45-54-year-old age bracket seeing a rise of 45% in the number of people living in rented accommodation. For those aged 65 and over, there has been a 46% rise in the number of people renting over the decade.
Finally, the research found that renters aged 35-44 have increased in number by 12%.
An essential sector for older renters
The private rented sector has been under increasing pressure in recent years to provide more accommodation for the growing number of people renting in the UK. Landlords are reporting being inundated with enquiries, while studies across agents show that there is an often large disparity between properties available and prospective tenants.
The Mortgage Works director for landlords Damian Thompson says: “Understanding the dynamics of the private rented sector has never been so important.
“The sector continues to support the lives of millions of people across the UK by providing homes for those who either can’t afford to buy or prefer not to own a home.
“We look forward to understanding the new government’s plans to create a stronger, fairer private rented sector, where legislation works for both landlords and tenants.”
Catering to target tenants
Buy-to-let landlords operating in the UK should be aware that their target tenant type may be slightly different to their expectations, with more older people seeking rental property than ever before. There are still high numbers of those in the younger age bracket renting, of course, but there is now a wider scope of target tenants.
According to The Mortgage Works, levels of homeownership peaked in 2007 among 55-64-year-olds, but this has fallen by around 10% since then, and in many cases the private rented sector has picked up this loss.
Almost half of all tenancies in England are now owned by portfolio or professional landlords – meaning those that own five or more homes in total. Portfolio landlords owning five or more properties have tripled from 5% in 2010 to 18% in 2021.
One of the potential benefits for landlords renting to older tenants could be that they may be more likely to stay put for longer. They may have more stable careers, or might already have an established network of friends and family in the area. This can mean fewer void periods for a landlord, reducing the hassle and expense of regularly seeking new tenants.
Statistically, wages among those in their early to mid-20s tend to be lower than those in the higher age categories. This could mean older renters are able to spend more on their accommodation, and may therefore be seeking a higher quality home or one in a better location.
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