Irene has bounced between rental properties for the better part of two decades. Now in her early 40s, she lives with her partner in a house in North London with five other housemates in their 20s and 30s.
Irene works in film production; irregular hours on set mean she and her partner cannot live in the cheaper suburbs of London. As a result, they enter middle age at the whim of the private rental sector.
“We keep getting kicked out because the landlords keep selling. So we keep going from one to the other [it] “It never seems to end,” she told the Financial Times.
Irene, who did not want to give her full name because she did not want to comment publicly on her personal finances, is among a group of older renters who can no longer buy a home due to the affordability crisis. This crisis has created a growing demographic for the emerging UK rental housing sector.
According to government data compiled by Paragon Bank, people over 35 accounted for more than 57 per cent of private renters in England last year, up from 49 per cent in 2013. And estate agency Savills predicts that new demand for private rented homes among the over-35s will increase eightfold by 2030.
The target of this shift is the corporate landlords, who claim to offer tenants more stability than small landlords can offer, and are ramping up investment to supply a frenzied UK rental market characterized by soaring demand and record costs.
The build-to-rent sector attracted £4.5bn of investment last year, according to Savills, with deals being struck at a time when asset managers are wary of most other property sectors. In June, US private equity giant Blackstone agreed to buy around 1,750 new rent-to-own homes from housebuilder Vistry through a subsidiary, marking the second major UK housing deal in eight months.
The UK rental market is more dominated by small private landlords than other countries such as the US, with few large institutional providers. According to Savills, the UK build-to-rent sector totaled 102,629 homes completed in April, accounting for just under 2 percent of all rental properties in Britain, but growing rapidly, with a further 161,750 homes under construction or planning. pipeline.
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Lucian Cook, head of residential research at Savills, says providers have “really picked up on this trend of increased demand among older tenants and are capitalizing on that”, with deals for multi-family and single-family homes reaching the second highest number ever. in the last quarter of 2023.
These include Grainger, the UK’s largest listed buy-to-rent landlord, which targets an older demographic with co-working spaces and events such as wine and cheese tastings aimed at the over-35s.
Older tenants are attractive to large developers. They tend to have more stable incomes than younger tenants and move less often, which reduces costs.
“It is more expensive when people move because we freshen up [the properties],” said Helen Gordan, CEO of Grainger. “It’s actually quite good for us to have people with us for a long time.”
Smaller landlords are also enthusiastic about this age category. Richard Rowntree, mortgage director at Paragon, which specializes in buy-to-let mortgages, said older tenants “make a good renter. . . What we hear is that there are fewer problems with anti-social behavior and noise.”
Rent-to-let groups such as Grainger and Greystar claim that they offer longer-term leases than smaller landlords, creating more stability for British tenants who have little legal protection against sudden rent increases or eviction.
“[Older renters] “We want to know that we can rent long-term and not have to worry about having to move because the property is being sold right under our noses,” said Todd Marler, senior director of operations at Greystar.
Danielle Bayless, chief operating officer at Quintain Living, a division of Quintain that manages the developer’s rental portfolio, said 32- to 45-year-old renters are “the segment growing the fastest” year after year. It hopes that tenants will move through the stages of life in their rental properties – getting married, having children and growing old.
An increase in build-to-rent homes would help tackle Britain’s supply shortage at a time when smaller landlords are under pressure from rising mortgage rates. In March, rents rose by a record 9.2 percent a year according to the Office for National Statistics, taking the average monthly rent in Britain to more than £1,200 and in London above £2,000.
The pace of new construction is likely to be glacial, however, given planning constraints and a lack of available sites, while the number of people renting in Britain is soaring. According to a recent report by the Resolution Foundation, the number of people living in private rented accommodation for more than a decade has almost doubled since the financial crisis.
Housing advocates say that without changes in the law, Britain’s lack of legal protections for tenants will also continue to make the country an unstable and expensive way to live.
In London, rent represents more than 30 per cent of gross pay for more than half of middle-income workers, such as many teachers and NHS staff, research by property fund manager Thriving Investments shows – a level deemed “unaffordable” by the UK government’s Office for National Statistics.
Outside the capital, rents are still unaffordable for 30 percent of these workers – those earning between the 25th percentile and the median income, typically around £27,000 to £35,000.
Cath Webster, chief executive of Thriving Investments, said the rental market was “seriously undersupplied” and there was an “urgent need for regional strategies” to channel investment into affordable housing.
Prime Minister Rishi Sunak’s government failed to pass the long-awaited tenant reform bill before parliament was dissolved for the general election. However, the Labor Party has committed to immediately abolishing so-called no-fault evictions and giving tenants the power to “challenge unreasonable rent increases”.
Meanwhile, tenants and activists say the lack of stability is having a damaging impact on people’s lives and hampering their ability to make decisions about marriage, children and work.
“Many people are nervous about settling down or starting a family if they are in an insecure rental situation,” said Dan Wilson Craw, deputy director of campaign group Generation Rent.
“There is very little autonomy for the tenant. It is very easy to lose your home. It is more expensive and you are exposed to rents going up due to the whims of the market and your landlord. [while] “The quality of housing is often very poor,” he added.
SpareRoom, the rental property platform, said the average age on its site has also risen, with 30 percent of active users looking for flatshares now over 35 years old.
“People are coming out of job changes, life changes, long-term relationships and maybe 10 years ago they would have rented their own place. Now they look around and think ‘there’s no way I can afford that’,” said Matt Hutchinson, director of communications at SpareRoom.
Irene, the tenant from North London, said she was frustrated. “It’s a gold mine for that [landlords] not true? We will have more stability and more money than we did in our twenties. But it’s horrible that we don’t have enough to live in a civilized, adult way.”