Older tenants feeling the pinch as incomes drop

Published by Max Salsbury for 24dash.com in Housing and also in Finance

Older tenants are struggling as rents rise and incomes drop, new research reveals.

During the year's second quarter, tenants aged 66-70 experienced a 16% drop in income, whilst those aged 56-65 felt a decrease of 8%.

According to the June HomeLet Rental Index, the amount of tenants aged 66-70 who have moved into rented accommodation from a home they owned has increased by 2% to 43%, when compared to the second quarter of 2011.

Ian Fraser, HomeLet’s Managing Director, said: “It seems retirees could be forced to eat into their savings to pay for the rising cost of living. The price of food, petrol and utility bills have rocketed in recent years, hitting people in the pocket.

“This is reflected by the drastic drop we’ve seen in older tenants’ disposable incomes over the past year. In contrast, the average cost of renting a home in the UK has increased by over 2% in the past year, and now stands at £768 per month.

“Despite this, we’ve already seen an increasing number over 55 year olds moving into the private rented sector from a home that they previously owned.

"With activity remaining low in the sales market and uncertainty over house prices, the flexibility of the private rented sector may appeal to many older homeowners, particularly those who have a considerable amount of equity in their home.

“With falling incomes from pensions and investments we could see further increases in the number of older tenants who are reliant on the equity released from selling their home, but those who aren’t in that position could really struggle with any further increases in rental values.”