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For years baby boomers have been much derided – and envied. Seen as the generation who had their fill of jobs for life, cheap properties and gold-plated pensions; those who have followed have had to suck up insecure employment, vanishing pensions and record house prices.
But it’s going to get worse – and it will be the younger generations who have to pay, unless the government starts to act and make housing a central tenet of everything they do.
The problem stems from a positive: we are living longer, and ageing. That shouldn’t be an issue, but it is when people do not own their own properties and are seeking to rent.
Analysis of the 2021 Census reveals younger people are more likely to be renting than owning their own home. Two decades ago, two-thirds of people in their mid-30s and mid-40s had a mortgage, by 2017 that figure had dropped to a half.
This age group are now three times more likely to rent than 20 years ago. If this trend persists, we will see increasing numbers of older people living in the private rental sector than today.
Later life renting isn’t something which is seen as a big deal right now, but it will be. Hamptons’ analysis predicts by 2033 – less than 10 years away – there will be over one million people aged 65 years old and over in the private rental sector.
It’s an astonishing figure, backed up further by analysis from Paragon bank, who claim in the past decade the older age cohort has increased by 38pc.
This figure is set to soar given households aged between 45 and 64 years old have increased by 70pc in the last 10 years.
Perhaps what is most surprising is how we have always talked of “Generation Rent” and assumed private renters are younger people, but Paragon’s research highlights it is those tenant cohorts in the age groups 55 to 64 years old, and 65 years and over, who are the fastest growing segments of the private rented sector, increasing by 118pc and 93pc since the turn of the last decade.
This rate of growth is nearly double the rate of the next fastest growing segment, those aged 35 to 44 years old. Generation Retired has arrived. Later life renting will become the norm.
It is a structural demographic shift which governmental policy seems ill-prepared for. In fact, the Centre for Ageing Better has cited how rising levels of private renting has major implications for financial insecurity among older people, with those aged 75 years and over spending almost half their income on rent.
In the English Housing Survey: Older people’s housing, 2020-21, they also highlight how 40pc of older private renters receive housing support at an average cost of £118 per week. But this later life renting is also an issue when someone is of working age.
In research carried out by Royal London, they suggest if someone is privately renting later in life, they will need a pension pot of almost double that of someone who owns their home outright to maintain their living standards (£260,000 vs £445,000).
The scary thing about these statistics is this reality will happen sooner than we realise – and yet nobody appears to be prepared.
Later life renters not only have different needs, which will mean adaptations to properties, but they will also be living on less. This means we will likely see an increase in cases of pensioner poverty.
Furthermore, given the increased numbers of people who will be in need of housing support, the government liability for this will be huge. And it will be a burden for the young.
As a landlord you may think I read these stats and rub my hands in glee, but the truth is, I shake my head in horror at the massive problems we are storing up for the future.
The burden on the state will be enormous, which will mean taxes will have to increase to cover the rising costs of housing people who don’t own their own home.
The stark reality of our country is that if we want to remain fiscally responsible, we must encourage home ownership, and the younger the better.
Generation Rent is about to retire – and taxpayers will pay the price
Those renting later in life will need a pension pot almost double that of homeowners