According to the latest quarterly index published by Countrywide lettings agency there has been a 6% annual growth in the number of tenants over the age of 50 renting property in the UK private rented sector (PRS).
The lettings agency also report that there has been a 7% annual decline in the number of tenants aged under 25 in the second quarter of 2013.
Monthly Private Rented Sector rents have increased by 1.1% year on year to average £845 (GBP) per calendar month (pcm). Scotland has witnessed the greatest rental price increase at 6.7% compared with the first quarter of 2013.
Yields remain strong across the UK with Wales seeing the highest yield at 6.6%, followed by the Midlands at 6.5% and the North at 6.4%.
Countrywide also report that on average rent arrears have fallen by 0.8% year on year but they did report that rent arrears have increased in Scotland by 2.4% and in Wales by 2%.
Countrywide’s data appears to differ dramatically from the recent increases in severe rent arrears reported by homelessness charity Shelter and specialist tenant eviction services, Legal 4 Landlords.
Most regions saw an increase in the number of over 50’s renting properties with
- East of England – 3% increase year on year
- East Midlands – 3% increase year on year
- Wales – Up 2%
- London – Up 2%
The significant decline in the number of tenants aged under 25 is greatest in Wales where there has been an 8% decrease, followed by the South West and East of England with a fall of 3% and the South East down 2%.
The Countrywide report says that weak salary growth and the rising cost of living is likely to be behind the younger generation moving back into the family home after university to save for a deposit to buy their first property.
The average UK tenancy length is now around 19 months, a slight increase on 2012 data:
- Central London – highest length of tenancy = 22 months
- Wales the lowest tenancy length = 14 months.
Countrywide say that 33% of their tenants have families and the recent decision by the Nationwide Building Society to extend the length of tenancies they will allow landlords to offer tenants is welcome news for those who like the security of renting a property on a long term basis.
Nick Dunning, group commercial director at Countrywide said: “Renting a property was previously a choice for the younger generation as they saved for a few years to get on the housing ladder. However, there is currently a demographic change in the UK rental market with people renting for longer and in some cases for life. The reasons for this vary and for some it is because they cannot afford to save a deposit to buy their own home but others choose to rent and enjoy the flexibility it gives them especially in terms of job mobility. Renting is a flexible and relatively hassle free way of living which suits many people’s lifestyles. It allows them to settle in a location where perhaps they couldn’t afford to buy but they enjoy living in. However, with a growing population of lifetime renters and more 18 to 25 years olds having to live with their parents for longer because they cannot afford to rent or buy, increasing the amount of good quality, affordable rental accommodation is needed to meet this demand.”
Tenants aged 41 and over now equate to 29% of all of those renting property through Countrywide in the UK and this figure is expected to rise in the future as banks are making it easier for landlords to offer much longer tenancies.
There are more competitive buy to let mortgage products available for property investors and tenant demand for rental property continues to outstrip supply, and the improvement of specialist Rent Guarantee insurance means that landlords can protect their long term rental incomes so all in all it is good news for landlords!