The lettings market is on the brink of a seismic shift as the high cost of buying a home means millions more people will be approaching retirement age still in the rental sector.

The latest analysis by the Pensions Policy Institute (PPI) predicts that by 2041, the number of pensioner households renting privately will almost treble to 1.7 million, or around one in six retired households, up from just one in twenty today. And the overall number of older renters could reach as high as 3.6 million, an increase of 1.9 million in just two decades.

The anticipated growth of pensioner households is a clear signal that the rental market is entering a major demographic shift.”

Talking exclusively to The Neg, Megan Eighteen (pictured), President of ARLA Propertymark, says: “The anticipated growth of pensioner households is a clear signal that the rental market is entering a major demographic shift. With one in six retired households expected to be renting, up from one in twenty, this places substantial pressure on both supply and affordability.”

It is also likely to lead to a fundamental change in letting agents’ customer bases. The typical renter will be older, often single, and looking for stability and accessibility rather than flexibility. Many will be divorced or separated, with fixed incomes and limited savings, and will move far less frequently than younger tenants.

And that could prove costly for agents, as the Renters’ Rights Bill has brought an end to fixed-term Assured Shorthold Tenancies, meaning there will be no commission from renewals. The shift could instead push agents to focus on income from management and other value-added services.

Changes in rental stock demand

It will also bring changes in demand for rental stock, with homes adapted for ageing tenants – step-free layouts, good heating and low maintenance requirements – becoming increasingly desirable, particularly in the North West, Yorkshire, Wales and London, where mid-life renting numbers have already surged.

According to Eighteen: ” The existing stock in the private rented sector risks becoming increasingly mismatched to older renters’ needs, such as mobility, accessibility, and downsizing, unless planning, building, and letting strategies adapt.”

And she is calling on “policymakers and developers to act now to boost the volume of accessible and age-appropriate rental homes”.

You can read the full PPI report here.