After a decade of steady growth, the number of older renters is poised to increase rapidly over the next 10 years according to research by Hamptons lettings agency.
The agency warns that the slowly rising share of older households renting has been coupled with a much more rapid increase in the number of older households more generally.
Taken together, it means the number of households renting in England aged 65 and above will double by 2030 - that’s less than seven years from now.
Today there are around 400,000 older households (over 65s) renting and this figure is set to pass the 1,000,000 mark in 2033.
At present households aged 65 and above have some of the highest homeownership rates in history. Growing up at a time when homeownership was rising has meant that just 5.7 per cent of households aged over 65 today rent their home privately.
The English Housing Survey suggests that the age group succeeding them are nearly twice as likely to rent privately as those currently over 65, with rented households making up 11.1 per cent of all people those aged 55 to 64 years.
Therefore, even if homeownership rates remain unchanged, demographics mean that within a decade the proportion of over 65s renting will rise to 11.5 per cent as fewer people reaching retirement are likely to own their home.
The growing number of older renters means that in cash terms households aged 65 and above will go from spending £5.1 billion in rent each year to £12.7 billion by 2033. This increase assumes no rental growth and reflects rents at 2023 rates.
To put these numbers into context, Hamptons says renters of all ages collectively hand over around £69.0 billion in rent annually.
Some 78 per cent of households aged 65 and above own their home outright. However, the number of households aged 65 and above who are renting their home overtook the numbers with a mortgage back in 2010.
Today, households aged 65 and above with a mortgage pay around £1.8 billion annually in repayments, less than half what gets handed over in rent.
Aneisha Beveridge, head of research at Hamptons, says: “The rising number of older renters reflects the gradual unwinding of the large increase in homeownership rates after the Second World War. As younger generations who missed out on the homeownership boom age, growing numbers are likely to be renting when they retire.
“The recent rise in mortgage rates will make it harder to buy later in life. It’s long been the case that if you’re not on the ladder by 40 years old, it becomes more difficult. But higher mortgage rates will make this challenge even tougher given the difficulties in stretching a mortgage term to reduce monthly payments, particularly in the early years.
“As households get onto the ladder later in life, over the next decade there’s likely to be an increase in older households still paying off their mortgage beyond the age of 65.
“However, this increase is likely to be a small fraction of the growing number who will be paying rent beyond pensionable age, which in turn has the potential to bear significant social, economic and political consequences down the line.”