More than 600,000 members of so-called ‘Generation Rent’ are facing an “inevitable catastrophe” of homelessness when they retire, according to the first government inquiry into what will happen to millennials in the UK who have been unable to get on the housing ladder as they age.
People’s incomes typically halve after retirement. Those in the private rented sector who pay 40% of their earnings in rent could be forced to spend up to 80% of their income on rent in retirement.
If rents rise at the same rate as earnings, the inquiry found that 52% of pensioners in the private rental sector will be paying more than 40% of their income on rent by 2038. This will mean that at least 630,000 millennials are unable to afford their rent.
They will find themselves homeless or with no choice but to move into temporary accommodation, at the state’s expense, according to the report by the all-party parliamentary group on housing and care for older people.“The number of households in the private rented sector headed by someone aged over 64 will more than treble over the next 25 to 30 years,” said Richard Best, the chair of the group. “But unless at least 21,000 suitable homes are built a year, there will be nowhere affordable for them to live. The consequence is bound to be homelessness for some.”
The report also forecasts that, in terms of quality of accommodation, the number of older households living in unfit and unsuitable private rented accommodation could leap from about 56,000 to 188,000 in 20 years’ time and to 236,500 in 30 years’ time. And it warns that the UK is headed towards an ‘inevitable catastrophe for the pensioners of tomorrow”.
Substandard housing is already known to be a direct cause of death for many older people: at least 53,000 winter deaths of old people over the last five years have been attributed to conditions related to living in a cold home.
Brendan Sarsfield, the chief executive of Peabody, who was a member of the inquiry, said: “The problem with the private rented sector is that people think it is the solution. It isn’t. Insecure tenancies and expensive rents mean that very often it is not a suitable tenure for older people. Many older people today were lucky enough to be able to buy their own home and watch the value of it grow. But for the pensioners of tomorrow there is little chance of being able to do that,” he added. “The broken housing market and failure of past governments to adequately fund social housing means that we are going to see many more older people struggling to pay the rent.”
George McNamara, the director of policy and influencing at Independent Age, said: “Our research has shown that the lives of too many older renters are blighted by insecure tenancies, woeful living conditions, dealing with unscrupulous landlords and constant financial stress.”
Polly Neate, the chief executive of Shelter, said: “This country is failing to build social homes at the rate we need them, leaving older generations who missed the homeownership boat with little choice but to rent privately. On top of being notoriously expensive and unstable, too many privately rented homes simply aren’t up to scratch either – condemning older people to live out their retirement in places which are cold, damp or infested with mice.”
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