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Brendan is the founding Chair of Sustainability for Housing. He has more than 20 years’ experience as a CEO in the social housing sector,...more
We must prevent ‘grey renting’ becoming a threat to our ageing population
The government must look to expand social rented housing to help older people on low incomes, argues Brendan Sarsfield
“Grey renting” is on the rise as more people are locked out of homeownership and forced to rent from a private landlord.
Paying high rents and with no property wealth, many of these older renters will be unable to afford their retirement and care. Supporting them in the future could bust the welfare system. Are we sleepwalking into another long-term policy disaster?
The private rented sector, or PRS, is typically associated with young people. But recent years have seen the rise of “grey renting”, as privately renting households headed by someone aged 65-plus have increased by 40% since 1996.
These renters pay the highest proportion of their incomes on housing costs, yet could be evicted at any time and don’t get the support available to renters in the social sector.
Pensions are not normally big enough to comfortably cover the high rents in some areas of the country, and if you’ve spent your entire life paying rents like this, you probably won’t have much in your pension pot anyway.
“Private renting is not only expensive for the individual, it is subsidised by taxpayers”
If older people are struggling now with final salary pensions, what sort of income will the next generation of pensioners have as we slide into a future of defined contribution pensions and those with no pension at all?
Private renting is not only expensive for the individual, it is subsidised by taxpayers. Private renters who can’t afford their rent can get support through benefits, and as more low-income households have been pushed into private renting by a lack of social housing, the benefit bill has ballooned. As people live longer, this – alongside increasing pressure on health and social care – is only going to get worse.
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There are currently at least 320,000 homeless people in the UK. With the rise of grey renting, how long before we start to see homelessness become a major issue for older people?
This is one of the issues being looked at by a new inquiry by the All-Party Parliamentary Group on Housing and Care for Older People. The group has issued a call for evidence on meeting our ageing population’s need for rented housing.There are two approaches government must consider to start tackling the growing problem. The first, without irony, is to look to Europe in reforming the PRS so it works for older people. Germany is held up as a model for a well-regulated, affordable rental sector. Forty per cent of Germans rent and often do so for their entire lives.
That’s because private tenancies in Germany are indefinite, and tenants can only be evicted under limited grounds.
The result is that an average German tenancy lasts 11 years, compared with 2.5 years in England.
There are also restrictions on in-tenancy rent increases as well as locally determined limitations on rents in new tenancies. Unsurprisingly, rents have risen far slower there and far fewer German tenants pay unaffordable rents.
This is a far cry from England’s system, where rent increases are uncontrolled and tenancies can be ended with two months’ notice for no reason at all.
Under these conditions it is no surprise that the rise of grey renting poses such a threat to our ageing population, whereas for Germans it is a happier norm.
“Low rents for older people on low incomes makes sense”
Government must also look to expand the supply of social rented housing. It provides long-term security and low rents, reduces the welfare benefit bill, supports people to save, and boosts consumer spending power.
Low rents for older people on low incomes makes sense. Uniquely, older people with a social landlord also benefit from a wide range of support services that are unavailable to others.
The challenges of paying for care and pensions in the future have been highlighted and not solved. Add large numbers of older people living in private rented housing and there is lots to be done, but done it must be if we are to avoid sleepwalking into a world where older people are living in cramped, insecure and expensive flat shares, fearing eviction and the state picking up the bill for the consequences.
The social and economic costs of this would be enormous, and felt for generations to come.
We need action now to prevent this from happening.
Brendan Sarsfield, chief executive, Peabody
