There are now more older people choosing to rent than ever before, but what does this mean for investors?
The shape of the rental market is changing once again in 2016, according to new reports, which seem to suggest that what has become a young professional’s haven in the last few years is now seeing a marked increase in older people who want to rent rather than buy.
Attributed to a rise in the number of people over the age of 50 who are getting divorced in the current climate, a report from Saga Home Insurance said recently that as many as a third of people aged older than 50 are now living in rented homes rather than one they own themselves.
As many as 20 per cent of these are single people who have been divorced and must now find somewhere new to live, and there has been a particular rise in the number of tenants who are aged between 50 and 54, which has become a dominant age bracket among older people who rent, taking the mantle from the over 70s.
But as the rental market changes shape in this way, how does it change the way that investors should be thinking when they are spending money on buy-to-let properties? And does a new demographic coming to prominence in the rental sector mean that people need to be thinking about different property types when they are buying for the private rented market?
In short, the best answer is yes. Older people are entirely different in their needs and wants to younger tenants, which means that the type of stock needed to appeal to them will also be markedly different.
The motivations for younger tenants tend to revolve around their careers and their lifestyle choices. For example, buying for younger tenants will often mean looking towards stock that has good transport links, access to the city and amenities such as shopping centres, restaurants and a strong nightlife.
But it’s important to remember that not all tenants are the same, and when a new demographic such as the over 50s comes to prominence in the UK, investors need to evaluate their needs before buying stock targeted at them.
For older people, research shows that they tend to care more about the properties themselves than what is around. While young people want to live in a great area with fantastic local amenities, older tenants will be looking for properties that are spacious, have a good layout and a high quality of build.
This is obviously markedly different to what other groups are motivated by, which means investors need to pay attention to what type of residential investment property they are buying, especially when the market is changing shape in the way it is at present. Ignoring demographics and their wants and needs as they become more prominent can be problematic in terms of long-term success in the market, and investors need to make sure they are always aware of how the market is changing to stay ahead of the curve.
This article has been provided by Experience Invest.