Pensioners Paying a Record 3.7bn on Rent

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It's been reported that pensioners now make up a larger segment of the rental market - why is that?

A recent report from Countrywide has shown that retired people in the UK now make up 8% of the rental market in the UK and it's a figure that seems to have steadily risen over the past 10 years.

It seems as though its considered the norm in the UK to purchase in your home in your 20s or 30s and come retirement, you are mortgage free. So why is this figure continuing to rise? The report doesn't offer any conclusions but there is a number of reasons that we think may be contributing to the rising number of retired tenants.

Rising Property Prices

It is very likely that a lot of people simply cannot afford to buy a home with the steadily rising property prices in the UK. Although it does vary across the country, here in Edinburgh it is certainly true that the market is very comeptitive, with it being uncommon for a property not to go above it's Home Report value and for their to be a number of offers in place at the time of Closing Date. With such a competitive market, it's easy to see that some people may be left behind in the property-ownership stakes.

Divorce Rates

Another factor which is likely to influence home-ownship and the need to rent into retirement is the current divorce rate, which as with the renting into retirement rates, has faced a steady rise. Unfortunately when a marriage doesn't work out, property which is owned by both parties needs somehow needs to be split. Often you may find one half buys the other out, leaving the other half in need of a new home, more often than not switching back to life as a tenant. And there is also the scenario where buying one half out is not an option and you find both halves end up back in rented properties.

Living with Debt

As with property prices and divorce rates, the number of people living with debt in the UK is also on the rise. Be it student debt, credit cards or bank loans, the current household debt for the UK stands at a considerable £7,349. Living with debt makes it more difficult to save for a deposit to buy a property and that before consideration of getting a mortgage comes into play.

The good news is that across the country, Scotland had one of the lowest rates of retired individuals living it rented property - 5.4% compared to Wales whom have 18%! It's also been found that the rates of renting appear to be lower across the country for pensioners, likely because they are living in smaller properties than your average family.

If you are concerned about renting into retirement and would like some advice about getting onto the property ladder, Cameron Stephen & Co. solicitors and estate agents in Edinburgh are here to help. We've helped many First Time Buyers purchase their properties and we'd love to help you too. Give us a call on 0131 555 1234 or take a look at our Special Fixed Fee offer for First Time Buyers.

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