Market Comment from Lee Fenn-Tripp, Director of Downer & Co Lettings.
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 pensioners 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 Newbury, 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 Newbury?
The Prudential published a survey recently that said nearly six out of ten pensioners had never owned a home. Two out of ten pensionable aged renters were required to sell up because of debt, just about one in ten pensioners sold their property to use the money to fund their retirement and the remaining one out ten pensioners, rented for other reasons.
Funding retirement is important as the life expectancy of someone from Newbury at age 65 (years) is 19.6 years for males and 22.1 years for females (interesting when compared to the National Average of 18.7 years for males and 21.1 years for females – Newbury is a good place to live..) The burdens of financing a long retirement are being felt by many mature people of Newbury. The state of play is not helped by rising living costs and ultra-low interest rates reducing returns for savers.
So, what of Newbury? Of the 4,182 households in Newbury, whose head of the household is 65 or over, not surprisingly 3,051 of households were owned (72.96%) and 928 (22.19%) were in social housing. However, the figure that fascinated me was the 127 (3.04%) households that were in privately rented properties.
Anecdotal evidence, by talking to both my team and other Newbury property professionals is that this figure is rising. More and more Newbury pensioners are selling their large Newbury 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 Newbury 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 older tenant – the capability to move at short notice can be convenient for those needing to move closer to family, and it doesn’t leave family members panicking to sell the property to fund care-home fees.
Newbury landlords should seriously consider low maintenance semi-detached bungalows and retirement apartments 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!
For more thoughts and opinions on the Newbury Property Market, if you are a Newbury Homeowner or Newbury landlord, please visit www.newburypropertynews.co.uk view our pages on Facebook or pop into our office in Cheap Street in Newbury.
