The number of over-65s renting out rooms to supplement their pensions is increasing, according to research from a leading home insurance company. Historically, many younger people at the start of their property owning journey have opted to rent out a room to supplement squeezed salaries. These days however the trend appears to be for people at the other end of the age scale to share their home with a ‘house or flat mate’ with 5.1million now in that situation.
According to More Than Home Insurance, one in seven pensioners are renting out rooms in their home to cover a shortfall in pensions and a reduced return on savings. These so-called ‘Granlords’ are actively choosing to supplement their incomes whilst not being completely up to speed with the rights and responsibilities of being a landlord. Alarmingly, the study which looked into the property owning habits of 1,500 retirees revealed that over 50 per cent are not cogniscent of the rules.
Many of the 1,500 people questioned in the study did not understand the responsibilities of being a landlord and were unprepared for taking in a lodger. There are numerous considerations when it comes to taking a lodger into the home, such as ensuring that the mortgage company is aware if the home owner does not own the property outright, informing the insurance company responsible for home and building cover, and also going through a reputable letting agent that ensures rigorous credit and background checks are carried out. Many pensioners will also not be wholly prepared for the psychological transition involved in accepting what is effectively a stranger into the home. One of the key considerations must be to ensure that prospective landlords are aware of the adjustments that need to be made in terms of ensuring that the rental room has adequate storage and an easy access to bathroom and kitchen facilities.
According to Government statistics, the average pensioner is left with just £33 pounds a week to spend as they like after spending £190 on living costs. So it’s hardly surprising that many people over 65 are now considering taking in a lodger; at least for the short-term.
Over the past year, the average desired rental period specified by retirees hoping to flatshare has fallen from over six months to just over four months. This drop in the average length of stay combined with the rise in the number of retired renters suggests more retirees are using flatsharing as a cost-effective stop-gap. This could be to cover a downsizing process or else to make ends meet when interest rates are at such historically low levels.
The optimistic slant to this development is that whilst retirees are having to forestall their retirement plans, this radical change in living situation is generally not for the long-term for most.
Please note: This article is intended as guidance only. No responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by Latimer Hinks. In addition, no responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by the firm.