Irene spent the better part of two decades bouncing between rental properties. Now in her early forties, she and her partner live in a family home in north London with five other flatmates in their twenties and thirties.
Irene works in film production; irregular hours on set mean she and her partner can’t live in the cheaper suburbs of London. As a result, they enter middle age at the whims of the private rental sector
“They keep kicking us out because the owners keep selling. So we keep going from one to the other and [it] It never seems to end,” she told the Financial Times.
Irene, who asked not to give her full name because she did not want to comment publicly on her personal finances, is one of a group of older renters who have been driven by a growing demographic due to the affordability crisis. Britain’s nascent build-to-rent sector.
According to government figures compiled by Paragon Bank, over-35s accounted for more than 57 per cent of England’s private landlords last year, up from 49 per cent in 2013. And estate agency Savills predicts that new demand among over-35s for private tenancy will in 2030, it will increase eightfold.
The move targets corporate landlords, who say they offer more stability to tenants than small landlords can provide, and are boosting investment in Britain’s frenetic rental market, which has seen soaring demand and record costs.
The build-to-let sector attracted £4.5bn of investment last year, according to Savills, brokering deals at a time when asset managers are wary of most other property sectors. In June, US private equity giant Blackstone agreed to buy about 1,750 new rental homes from housebuilder Vistra through a subsidiary, its second major UK housing deal in eight months.
The UK rental market is more dominated by small private landlords than in other countries such as the US, with a few large institutional providers. Britain’s build-to-rent sector reached 102,629 completed homes in April, according to Savills, representing just under 2 per cent of all rental homes in Britain, but growing rapidly with a further 161,750 homes under construction or planned. conduit.
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Lucian Cook, head of residential research at Savills, said providers had “really picked up on this trend of greater demand among older tenants and are catering to it”, with multi-family and single-family home offers reaching the second highest number on record. in the last quarter of 2023.
These include Grainger, the UK’s largest listed buy-to-rent landlord, targeting an older demographic with coworking areas and events such as wine and cheese tastings aimed at the over 35s.
Older tenants are an attractive proposition for large developers. They typically have more stable incomes than younger renters and tend to move less often, which lowers costs.
“It’s more expensive when people move out because we refresh [the properties]” said Grainger CEO Helen Gordan. “It’s actually quite good for us to have people with us for a long time.”
Even smaller landlords are excited about this age category. Richard Rowntree, mortgage director at Paragon, which specializes in buy-to-let mortgages, said older tenants “are good tenants. . . We have heard that there are fewer problems in terms of anti-social behavior and noise.’
Building-to-let groups such as Grainger and Greystar say they offer longer leases than smaller landlords can, which is said to create greater stability for UK tenants who have little legal protection against sudden rent increases or eviction.
“[Older renters] they want to know they can rent long-term and not think they’re going to have to move because it’s going to sell out from under them,” said Todd Marler, senior director of operations at Greystar.
Danielle Bayless, chief operating officer of Quintain Living, the division of Quintain that manages the developer’s rental portfolio, said 32- to 45-year-old renters are the “fastest-growing segment year-on-year.” He hopes tenants will go through life stages — getting married, having kids and growing old — in rental properties.
An increase in the number of homes built to rent would help solve Britain’s supply crisis at a time when smaller landlords have come under pressure from rising mortgage rates. Rents rose by a record 9.2 per cent annually in March, according to the Office for National Statistics, pushing the average monthly rent in the UK to more than £1,200 and in London to more than £2,000.
However, the pace of new building is likely to be glacial, given planning constraints and the lack of available space, while the number of people renting in Britain is skyrocketing. A recent report by the Resolution Foundation said the number of people living in private rented accommodation for more than a decade has almost doubled since the financial crisis.
Housing campaigners say that without legislative changes, the lack of legal protections for UK tenants will also continue to make for an unstable and expensive way of life.
In London, rents make up more than 30 per cent of gross wages for more than half of middle-income workers, such as many teachers and NHS staff, according to research by property fund manager Thriving Investments – a level the country considers “unaffordable”. UK Office for National Statistics.
Outside the capital, rent is still unaffordable for 30 per cent of these workers – those earning from the 25th percentile to the median income, typically around £27,000 to £35,000.
Cath Webster, chief executive of Thriving Investments, said the rental market was “critically underserved” and there was an “urgent need for regional strategies” to direct investment in affordable housing.
Prime Minister Rishi Sunak’s government failed to pass a long-awaited tenant reform bill before parliament was dissolved for a general election. But Labor has pledged to immediately scrap so-called no-fault evictions and empower tenants to “challenge unreasonable rent increases”.
Meanwhile, tenants and activists say the lack of stability is having a detrimental impact on people’s lives, limiting their ability to make decisions about marriage, children and employment.
“A lot of people are nervous about settling down or starting a family when they’re in a precarious tenancy,” said Dan Wilson Craw, Group Deputy CEO of Generation Rent.
“The tenant has very little autonomy. It is very easy to lose your home. It’s more expensive and you’re exposed to rents rising at the whims of the market and your landlord, [while] the quality of the houses is often very poor,” he added.
SpareRoom, a rental platform, said the average age on its site is also rising, with 30 percent of its active users now looking for apartments over the age of 35.
“People come from job changes, life changes, long-term relationships, and maybe 10 years ago they would have rented a place themselves. Now they’re looking around and going, ‘There’s no way I can afford that,'” said Matt Hutchinson, director of communications at SpareRoom.
Irene, a tenant in north London, said she was frustrated. “It’s a gold mine. [landlords] It’s not this way? We will have more stability and more money than in our twenties. But it’s appalling that we don’t have enough to live in a civilized, grown-up way.”