Peterborough’s Ageing Population Turning to Rentals: What it Means for Landlords

The Rise of Retirees Renting in the UK and Peterborough

Recent figures from the Office for National Statistics (ONS) reveal that across the UK, 486,795 households are occupied by individuals aged 65 and over who live in private rental sector homes. This accounts for 6.71% of all older adults (OAPs) now renting privately.

Ten years ago, only 267,704 households were occupied by individuals aged 65 and over in the private rental sector, representing just 4.39% of older adults. This marks a significant 52.8% increase in older people privately renting.

This data raises two crucial questions:

• How many of these older renters have been tenants their entire lives?
• How many have transitioned from homeownership to renting in later years?

Why Are Retirees Renting?

In Peterborough, as in other parts of the country, downsizing and renting during retirement can be a practical decision for older generations. By accessing the equity tied up in their homes, retirees can enhance their financial security. But why are more retirees choosing to rent, and what opportunities does this present for Peterborough’s landlords?

A survey by Prudential sheds light on this trend:

• Nearly 60% of older renters have always rented, reflecting a lifelong position in the private rental market.
• Around 20% have sold their homes to address debt challenges.
• 10% have chosen to sell and rent deliberately, using the proceeds to fund their retirement.
• The remaining renters cite various personal reasons.

Financial stability in retirement is increasingly important. Men in Peterborough, upon reaching 65, have an average life expectancy of 17.9 years, while women can expect to live an additional 20.4 years. These figures are slightly below the national averages of 18.1 years for men and 20.6 years for women. However, longer life expectancies come with the challenge of sustaining finances over an extended period, particularly as inflation and rising living costs erode savings.

The Rental Landscape in Peterborough

In Peterborough:

• 23.3% of residents are aged 65 or older.
• 68.3% of these own their homes outright.
• 5.9% own with a mortgage.
• 18.5% live in social housing.
• 7.3%, or 1,431 older households, rent privately.

While this figure is currently small, it is steadily increasing. Estate agents and property professionals report a growing trend of retirees selling larger homes to downsize into rented accommodation. This decision often reflects a desire for simplicity and financial flexibility.

Why Renting Works for Retirees

Renting offers several advantages:

• Equity release: Selling a home can free up substantial funds, which retirees might use to assist grandchildren, invest, or enhance their lifestyle.
• Predictable expenses: Fixed monthly costs, often including maintenance, provide budgeting certainty.
• Reduced burdens: Renters avoid unexpected repair costs and other responsibilities of homeownership.
• Flexibility: Renting allows retirees to relocate easily if their circumstances change, such as moving into assisted living.

Opportunities for Peterborough’s Landlords

This shift presents a unique opportunity for Peterborough’s buy-to-let investors. Older tenants often seek:

• Low-maintenance properties.
• Homes designed with accessibility in mind.
• Locations near essential amenities such as bus routes, GP surgeries, and shops.

Semi-detached bungalows are especially in demand due to their practicality and accessibility. Retirees value stability, making them reliable, long-term tenants. Many are also willing to pay a premium for properties that include maintenance services and other conveniences.

The Bigger Picture for Landlords

As the population ages, demand for rental properties suitable for older tenants is expected to grow. The Centre for Economics and Business Research (CEBR) predicts that the number of older adults privately renting will double in the next decade.

For landlords in Peterborough, this trend highlights the importance of tailoring portfolios to meet the needs of older tenants. By doing so, landlords can secure steady returns while supporting an ageing community.

Creating housing solutions that balance profitability with social responsibility will be vital. As leaders in the Peterborough property market, we must champion approaches that meet these emerging needs while promoting long-term sustainability in the rental sector.

What Are Your Thoughts?
We'd love to hear your views. What opportunities do you see in this evolving market?