The UK’s rental market is facing a demographic shift, with older renters becoming a more prominent force. This presents a lucrative opportunity for large-scale developers, who are increasingly targeting this group with new build-to-rent schemes.

A growing number of people over 35 are finding themselves stuck in the private rental sector. This is driven by a perfect storm of rising house prices, stagnating wages, and limited affordable housing options.

Government data reveals an increase in the proportion of private renters over 35, jumping from 49% in 2013 to over 57% in 2023. Savills, a leading estate agency, predicts this trend will continue, with demand from over-35s for private rentals increasing eightfold by 2030.

A New Breed of Landlord

Traditionally, the UK’s rental market has been dominated by small, private landlords. However, the emergence of large corporate landlords is shaking things up. These companies are investing heavily in build-to-rent projects, seeking to provide a more stable and professional rental experience for tenants.

The build-to-rent sector attracted a massive £4.5 billion in investment last year, with major players like Blackstone, a US private equity giant, acquiring thousands of new rental homes.

Why Are Older Renters So Appealing?

Older renters are particularly attractive to large developers for a number of reasons:

• Stable Finances: They tend to have more secure incomes than younger renters, making them less risky tenants.
• Lower Turnover: Older renters typically move less frequently, reducing the costs associated with tenant turnover, such as refurbishment and re-letting.
• Fewer Issues: Landlords report fewer problems with anti-social behaviour and noise complaints from older renters.

The Promise of Stability

Build-to-rent providers are promoting their schemes as offering greater stability than traditional rental arrangements. They promise longer-term tenancies, providing a sense of security that is often lacking in the current rental market.

This is especially important for older renters who are looking for a place to settle down and put down roots. However, critics argue that without legal reforms, the UK’s rental market will remain unstable, regardless of the emergence of large-scale landlords.

A Growing Crisis

The UK’s housing crisis is deepening, with a chronic shortage of affordable housing. Renters are facing record rent increases, with the average monthly rent in Great Britain surpassing £1,200.

In London, rent accounts for more than 30% of gross pay for a significant proportion of workers on moderate incomes, including teachers and NHS staff.

The government is facing mounting pressure to address the affordability crisis, with the need for more affordable housing options becoming increasingly urgent.

A Glimpse of the Future

While the build-to-rent sector is growing, it is unlikely to be a quick fix to the UK’s housing crisis. Planning constraints and a lack of available land will limit the pace of development.

Campaigners are calling for fundamental changes to the legal framework governing the rental market, arguing that without stronger tenant protections, the UK’s rental sector will remain unstable and expensive.