Feb

Not getting too old for this s*** – Surge in over 60s renters, but rental deposits pose the same hurdle as younger generations

admin

The latest research by tenant deposit
replacement scheme, Ome, has
looked at the cost required to secure a rental property for the growing trend
of over 60s opting for the rental market over homeownership and what percentage
of monthly income this initial step requires, as well as how it compares to
younger generations.

With high house prices coupled with the
improving face of the rental sector causing many of us to rent for longer, Ome
looked at the cost of the average rental deposit and what this translates to as
a percentage of monthly net income for tenants based on gender and age.

With the average rental deposit currently
setting tenant’s back £1,139, it can be a tough ask to accumulate such a large
sum of money in order to secure a rental property.

For the average male, this cost equates to
almost half a month’s wages (47%), climbing to 69% for the average female.

When it comes to age, those aged between 18-21
face the toughest task with the average tenant deposit accounting for 118% of
the average salary. This falls to 105% for male tenants, while female tenants
in this age range are looking at 138% of the net monthly wage to cover a
deposit.

For those aged 22-29, it doesn’t get much
easier, with a rental deposit costing 68% of the average net salary, falling
marginally to 62% for males but climbing to 76% for females.

The latest English Housing Survey shows that
over the last decade there has been a significant increase in the number of
people aged 55-64 living in the rental sector. This also coincides with a fall
in the number of people owning their own home in this age group.

In the words of Roger
Murtaugh, you may think those approaching retirement would be getting too old
for this s***, but the changing face of the rental sector proves this isn’t the
case, with more and more of us opting to rent, well into later life due to a
more tenant-friendly approach and better facilities for the more mature tenant.

However, Ome’s research
shows that those aged 60 and above will on average, be required to spend the
same proportion of salary to secure a rental property as those aged 22-29.
Again, this drops to 55% for males in this age range and climbs to 88% for
females!

Those aged between 30 and 59 are slightly
better off as they hit full pace career-wise, although it would still require
around half of their net monthly income to stump up a rental deposit.

Co-founder of Ome,
Matthew Hooker, commented:

“There are many tenants who are financially
able to opt for the traditional deposit path when renting and for many it is a
more preferable route, allowing them to pay there and then without any ongoing
commitment or costs.

That said, as our research demonstrates, it can
provide a tricky obstacle and while it might not be such as issue in the
long-term, it poses a cash flow problem for those required to stump up as much
as a month’s wages in one hit.

Of course, those in the youngest age groups
tend to be on the lowest wages and as a result, have to pay out more of their
monthly wage on a deposit, but more often than not they have a support network
of family that can help them start out on their rental journey and contribute
to some of the costs.

However, this isn’t always the case for those
60 and above who may be on a lower wage and don’t have the option to borrow
from friends or family and addressing this issue has been one of the driving
factors behind the launch of deposit alternatives such as Ome.

These alternatives allow tenants the choice to
pay a smaller monthly fee over the period of a tenancy and with more of us
remaining in the rental sector by choice, it provides a different path to do so
without having to worry about large upfront deposits.”

Income and deposit cost by Gender (UK)
Gender	Average annual net salary	Average monthly net salary	Average rental deposit	Rental deposit as % of monthly salary
Male	£29,070	£2,422.47	£1,139	47%
Female	£19,677	£1,639.73	£1,139	69%

Income and deposit cost by age group (UK)
Age group	Average annual net salary	Average monthly net salary	Average rental deposit	Rental deposit as % of monthly salary
18-21	£11,541	£961.77	£1,139	118%
22-29	£20,037	£1,669.76	£1,139	68%
30-39	£25,249	£2,104.11	£1,139	54%
40-49	£27,863	£2,321.94	£1,139	49%
50-59	£26,039	£2,169.90	£1,139	52%
60+	£20,232	£1,686.03	£1,139	68%

Income and deposit cost by male age groups
Age group	Average annual net salary	Average monthly net salary	Average rental deposit	Rental deposit as % of monthly salary
18-21	£13,009	£1,084.11	£1,139	105%
22-29	£21,939	£1,828.26	£1,139	62%
30-39	£29,214	£2,434.48	£1,139	47%
40-49	£33,834	£2,819.53	£1,139	40%
50-59	£32,459	£2,704.89	£1,139	42%
60+	£24,904	£2,075.33	£1,139	55%

Income and deposit cost by female age groups
Age group	Average annual net salary	Average monthly net salary	Average rental deposit	Rental deposit as % of monthly salary
18-21	£9,919	£826.55	£1,139	138%
22-29	£18,066	£1,505.49	£1,139	76%
30-39	£21,042	£1,753.46	£1,139	65%
40-49	£21,855	£1,821.29	£1,139	63%
50-59	£20,185	£1,682.06	£1,139	68%
60+	£15,521	£1,293.44	£1,139	88%