More than 630,000 millennials will be unable to afford their rent when they retire – that’s according to a government inquiry looking into the long-term impact of young people being unable to get on the housing ladder.
The number of households in the private rented sector headed up by someone over the age of 64 will treble in the next three decades, the all-party parliamentary group on housing and care for older people found.
This poses a potential homelessness problem for an ageing millennial generation – a third of whom face renting their whole life. The report warns of an “inevitable catastrophe for the pensioners of tomorrow”.
After retirement a person’s income typically drops by 50%, and those who aren’t homeowners will be spending a larger proportion of their salary on rental costs – today renters in London are spending, on average, 50% of their salary on rent, and the UK average is 27%.
If rents rise at the same rate as earnings, 52% of pensioners in the private rental sector will be paying more than 40% of their income on rent by 2038, the report said – which could also be expensive for the taxpayer if more people rely on state-funded temporary accommodation.
“The consequence is bound to be homelessness for some,” said Richard Best, the chair of the all-parliamentary group, who said the UK needed to be building at least 21,000 suitable homes a year in order to meet demand.
“Don’t even want to think about it,” responded another. “Can’t figure out how we’ll afford to do any of the big adult things that are expected of us. Don’t want anything complicated, but you’d think being able to afford a house should be more accessible!”
The report also forecasts the quality of accommodation available will become less fit for purpose as demand increases – an issue previously flagged by Age UK.
“Many older people are living in unsafe, unsuitable and unhealthy accommodation, with little hope of being able to move somewhere better or improve their homes,” the charity said in a recent report. At least 53,000 winter deaths of old people over the past five years have been attributed to conditions related to living in a cold home.
The number of homes that fall under the categorisation of “unfit” could rise from around 56,000 to 188,000 in 20 years’ time and to 236,500 in 30 years’ time, today’s report found.
The all-parliamentary group has called for a national strategy including the building of at least 38,000 new rental homes specifically for older people built over the next 30 years – more than 1.1 million extra homes by the late 2040s.