Recent statistics published by the Office of National Statistics show that there are 267,704 private rented households in the Country occupied by people aged 65 and older and 4.39% of OAP renters are living in private rented property.
It got me thinking two things. How many of these OAP’s (people aged over 65 for the purposes of this blog post) 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 Colchester, 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 an opportunity for buy to let landlords of Colchester?
The Prudential published a survey recently that said nearly six out of ten OAP renters had never owned a home. Two out of ten OAP renters were required to sell up because of debt, just about one in ten OAP renters sold their property to use the money to fund their retirement and the remaining one out ten OAP renters, rented for other reasons.
Funding retirement is important as the life expectancy of someone from Colchester at age 65 (years) is 19.0 years for males and 21.3 years for females (compared to the national average of 18.7 years for males and 21.1 years for females). The burdens of financing a long retirement are being felt by many mature people of Colchester. The state of play is not helped by rising living costs and ultra-low interest rates reducing returns for savers.
Of the 10,953 households in Colchester, whose head of the household is 65 or over, 8,396 households were owned (76.65%) and 1,998 (18.24%) were in social housing. However, the figure that interested me most is the 346 (3.16%) households that were in privately rented properties.
Anecdotal evidence from my colleagues and other Colchester property professionals indicates this figure is rising. More Colchester OAP’s are selling their larger Colchester homes and downsizing into smaller rented properties allowing them to the equity from their old home. This equity can be gifted to grandchildren (helping them onto the property ladder), invested in plans that produce an income so they can continue to live life on their terms.
These Colchester OAP renters have a fixed monthly expenditure which makes it easier to budget along with peace of mind knowing the property maintenance, building upkeep and, in some cases, even the gardening are all included in the rent. Renting also makes it easier for OAPs who may need to move, at short notice, into nursing homes, without burdening family members.
There’s certainly a niche investment opportunity for Colchester landlords. Research low maintenance semi-detached bungalows on bus routes close to doctor’s surgeries, shops etc. The right property will not only attract Colchester OAP renters but also a top end rental income and the best possible return on your investment.
If you’re one of the Colchester OAP renters I’d be interested to hear your thoughts about renting properties in Colchester. If you’re looking to invest in properties in Colchester feel free to send me a link to the property on Rightmove or Zoopla and I’d be happy to give you my opinion and undertake free pre-purchase visits to your shortlist of potential properties to provide a valuation. Please ring on 01206 862288 to discuss any aspect of the Colchester property market, email firstname.lastname@example.org or add your comments below.