Recent statistics published by the Office of National Statistics show that there are 267,704 private rented households in the Country that are occupied by people aged 65 and older, meaning 4.39% of OAP’s are living in private rented property.
It got me thinking two things. How many of these OAP’s have always rented and how many have sold up and become a tenant? In retirement, selling up could make financial sense to the mature generation in Letchworth, potentially allowing them to liquidate the equity of their main home to enhance their retirement income. I wanted to know why these older people rent and whether there was opportunity for the buy to let landlords of Letchworth?
The Prudential published a survey recently that said nearly six out of ten OAP renters had never owned a home. Two out of ten OAP renters were required to sell up because of debt, just about one in ten OAP renters sold their property to use the money to fund their retirement and the remaining one out ten OAP renters, rented for other reasons.
Funding retirement is important as the life expectancy of someone from Letchworth at age 65 (years) is 18.8 years for males and 20.7 years for females (interesting when compared to the National Average of 18.7 years for males and 21.1 years for females). The burdens of financing a long retirement are being felt by many mature people of Letchworth. The state of play is not helped by rising living costs and ultra-low interest rates reducing returns for savers.
So, what of Letchworth? Of the 4,131 households in Letchworth, whose head of the household is 65 or over, not surprisingly 2,598 of households were owned (62.89%) and 1,360 (32.92%) were in social housing. However, the figure that fascinated me was the 104 (2.52%) households that were in privately rented properties.
Anecdotal evidence, by talking to both my team and other Letchworth property professionals is that this figure is rising. More and more Letchworth OAP’s are selling their large Letchworth homes and renting something more manageable, allowing them to release all of their equity from their old home. This equity can be gifted to grandchildren (allowing them to get on the property ladder), invested in plans that produce a decent income and while living the life they want to live.
These Letchworth OAP renters know they have a fixed monthly expenditure and can budget accordingly with the peace of mind that their property maintenance and the upkeep of the buildings are included in the rent. Many landlords will also include gardening in the rent! Renting is also more adaptable to the trials of being an OAP – the capability to move at short notice can be convenient for those moving into nursing homes, and it doesn’t leave family members panicking to sell the property to fund care-home fees.
Letchworth landlords should seriously consider low maintenance semi-detached bungalows on decent bus routes and close to doctor’s surgeries as a potential investment strategy to broaden their portfolio. Get it right and you will have a wonderful tenant, who if the property offers everything a mature tenant wants and needs, will pay top dollar in rent!
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