Many elderly people in their retirement are choosing to downsize and sell up in order to fund a more financially comfortable retirement. According to research by Prudential, 25% of retirees are living in rented property. Over 40% of these tenants are former homeowners. By selling their homes and renting, they are able to pay off any debts and use the money to supplement their retirement income. In fact, many elderly people are counting on the value of their property to top up their pension pots.
Another reason for retirees to sell their homes and rent elsewhere is simply to move closer to their family. With more free time available, they are able to spend more time with their family.
Group Director at Key Retirement Solutions, Dean Mirfin, explains:
It’s common for people to want to move near their children and grandchildren in retirement, but this might not be possible if they live in a more expensive part of the country. Selling up and renting may enable you to make the move.
In a recent poll of private renters (NLA Quarterly Tenant Panel: Q1 2016), figures show that the number of people living in private rented accommodation in retirement has increased by more than 200,000 (13%) since the end of 2012.
Carolyn Uphill, Chairman of the National Landlords Association, has said:
More and more people are turning to private rented housing at every stage of their lives, including in retirement.
Landlords appreciate the stability and assurances often provided by older households, but are finding it increasingly difficult to build businesses around the needs of potentially vulnerable tenants.
Elderly people are known to make fantastic tenants, and can be a dream come true for many landlords. Those living on a pension are likely to have reliable incomes to afford their rent, they’re significantly less likely to be criminals, and they are more likely to settle into the same property for longer without needing to move for work or change of lifestyle.
So why are retired tenants experiencing difficulty in finding private rented accommodation?
During the same timeframe that retired tenants have increased by more than 200,000, the proportion of landlords who let to retirees has almost halved.
Carolyn Uphill adds:
Successive cuts to the welfare budget, uncertainty about pension provisions, and the devastating impact of the Government’s tax changes are likely to mean that private landlords will soon be unable to provide homes in high cost areas like Central London for anyone without a well-paying job.
As the proportion of retired renters continues to grow there’s a real worry that homes won’t be available in the private sector, forcing people to look further afield – leaving communities they have known and contributed to for decades.
Things to remember when you rent to elderly or retired tenants.
When marketing your property to elderly tenants, you will want to keep in mind that older tenants may have specific requirements that you might not have had to cater for previously with younger tenants.
You will need to consider the property’s accessibility. Will the tenant need a stair lift installed or a ramp at the property entrance? Many elderly tenants living alone choose to have a pet companion, so you may need to adjust your boilerplate tenancy agreement to allow for a pet or two.
Though you might think an older couple would be a breath of fresh air from your usual demographic of tenants, you also have to ask yourself whether the property is even suitable for them or is there a reason why you’ve only attracted certain types of tenants in the past. Is the neighbourhood suitable for an elderly couple? If it’s a student-dominated neighbourhood or an area with a lot of nightlife, it may not be the most ideal property for an elderly couple looking for a quiet community to settle into in their old age.
It’s important to be transparent with any tenant if you feel that the property may not be a good match for them. No landlord wants unhappy tenants, especially when happy tenants are more likely to rent the property for a longer duration.
One very real issue that deters some landlords from renting to elderly tenants is the emotional toll it can eventually take on you. In time, you may notice that your elderly tenant starts to behave a little unusually with age. Perhaps they forget to pay their rent or accidentally pay it twice, or frequently lose their keys. As a compassionate landlord, this can often be upsetting to observe. Especially if you have built a close relationship with your long-term tenant and often visit just to check up.
You need to be able to recognise the signs if your elderly tenant is beginning to lose their mental capacity – increasing forgetfulness or confused behaviour – and have a plan in place for how you should act responsibly as the landlord in this situation. This is why it’s a good idea to keep the contact details of the tenant’s family so that they are aware of the situation and can make a decision on whether it’s time for your tenant to have some extra help. Not only that, but you’ll have someone to notify should there be an emergency.