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UK sees growth in older private sector tenants

There has been a 6% year on year growth in the older group of tenants over all with most regions seeing a rise in this sector, according to the latest quarterly index from Countrywide, one of the UK’s biggest lettings agencies. There has also been a 7% year on year decline in the number of tenants aged under 25 in the second quarter of 2013.

Average monthly rents have risen by 1.1% year on year to £845 per calendar month. Scotland seeing the greatest increase at 6.7% compared with the first quarter of 2013.

Yields remain strong across England, Scotland and Wales with Wales seeing the highest yield at 6.6%, followed by the Midlands at 6.5% and the North at 6.4%. Arrears fell on average by 0.8% year on year but increased in Scotland 2.4% and Wales 2%.

Most regions saw a rise in the number of over 50’s renting properties with East of England and East Midlands recording the greatest increase at 3% year on year, followed by Wales and London up 2%.

The significant decline in 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 firm’s report says that weak wage 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 length of tenancy is now 19 months in the UK, a slight increase on 2012.  Central London has the highest length of tenancy at 22 months and Wales the lowest at 14 months.

With families making up a third of tenants renting a property through Countrywide, the firm points out that the recent decision by the Nationwide Building Society to extend the 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.

‘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,’ said Nick Dunning, group commercial director at Countrywide.

He pointed out that 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.

Tenants aged 41 and over now equate to nearly a third or 29% of all of those renting a property through Countrywide in England, Scotland and Wales and Dunning said that this figure is likely to rise in the future.

‘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,’ he explained.

‘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,’ he added.

He also point3d out that with banks making it easier for landlords to offer longer tenancies, more competitive buy to let mortgage products available and demand for rental accommodation outstripping supply, there is likely to be a more diverse range of affordable rental properties.

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