Build-to-rent homes have primarily been built with younger renting demographics in mind. Yet, people aged 55 plus, account for a significant portion of the market. It’s set to expand, too: by 2043, almost a quarter of the population will be made up of people aged 65 and over.
Therefore, is it time for build-to-rent operators and the private renting sector to start thinking more about older renting demographics?
Here, we look at senior living and build–to–rent homes and the role our older population play in the private rental market and the potential opportunities at hand.
What is build-to-rent (BtR)?
Build-to-rent refers to a type of new housing development where a single entity builds and owns a property specifically for the purpose of renting it out to individuals or families.
Build-to-rent developments range in size from a few units to hundreds and can include apartments, townhomes and even single-family homes.
The main difference between build-to-rent and traditional rental properties is that build-to-rent homes are owned by one organisation. They are operated and managed by a property operator rather than owned and managed by individual landlords.
This allows for a more centralised and professional management, often resulting in higher-quality housing options for renters.
Why does build-to-rent primarily appeal to younger renters?
Build-to-rent operators often appeal more towards younger renters for several reasons. For starters, younger demographics are more likely to rent because they’re priced out of homeownership. House prices continue to rise much faster than wages, and historically, renters are made up primarily of younger demographics.
The features of build-to-rent properties were primarily designed with younger renters in mind. They offer amenities, such as shared social spaces, fitness centres, co-working sections and outdoor areas with BBQs and bar areas. Additionally, build-to-rent properties are often located in urban areas where younger people mostly live and work. This makes build-to-rent a convenient housing option for this demographic.
Are renting demographics changing?
They’re not changing so much as they are expanding. Recent analysis from a leading banking group reveals that people in the 55-64 years and 65 years and over cohorts of tenants are the fastest-growing segments of the private rented sector.
The number has increased by 118% and 93%, respectively, since the turn of the last decade. The number of privately rented homes in England with homeowners 55 or over has more than doubled since 2009/10 to 576,000. We’re now at a point where tenants make up a variety of demographics – renting isn’t necessarily just for younger people anymore.
Is there a gap in the market for senior living build-to-rent homes?
UK mortgage lending is expected to fall in 2023 due to rising interest rates and lower household incomes. Subsequently, many older people may turn to rent as a viable alternative to home ownership.
Yet, it’s not just the current cost of living crisis affecting change. Shifting attitudes towards retirement are also driving the change. Figures from the English Housing Survey show that almost 1.5 million people 65 and over are now choosing to rent as a lifestyle choice.
This is where build-to-rent can have a significant impact with its features like on-site maintenance. As people get older, their tolerance for fixing things around the house will likely decline. Therefore having access to aspects like easy repairs is appealing. The community factor of build-to-rent may also appeal, especially if it’s catered towards seniors.
What makes a good senior living build-to-rent home?
Developers plotting their next build-to-rent move will do well to consider seniors. Creating bespoke homes designed for those over a certain age can increase the appeal and open a new audience of renters. A typical build-to-rent home designed for seniors should feature:
- Accessibility. Homes should be designed with the demographic in mind.
- Proximity to attractions. Having a property close to shops and other key amenities is vital for attracting renters who don’t drive or frequently use public transport.
- Range of lease options. Flexibility appeals to all types of renters, no matter their age.
- Amenities and services. Senior living build-to-rent homes should offer a range of amenities and services tailored to older adults’ needs and preferences.
- Community and social connections. A sense of community and social connection can be particularly important for seniors.
Many structures designed for current build-to-rent setups can be adapted for senior build-to-rent living and compete with retirement homes and properties specifically for those over-55s. Indeed, there are many options for elders buying a property but not so many for renters, especially regarding affordable housing. Build-to-rent can fix these issues and more, including offering housing at a time when there’s a rental shortage.
Build-to-rent and elder urban living
Many seniors are delaying adopting independent living, such as moving to rural surroundings. Instead, they’re ageing in one place, choosing to stay in more metropolitan areas that provide communities and culture.
With most build-to-rent homes located in busier cities and suburban areas, operators have an opportunity to meet senior renting needs head-on and create housing with downsizers in mind. By incorporating design concepts to appeal to senior living, these residents can enjoy a better quality of living in the rental sector and have more housing choices.
Not too old to rent
There’s a sea change happening in the rental sector, and it’s no longer solely popular with younger demographics.
All ages rely on renting to enjoy a good quality of life, and there’s a growing demand from senior renters who are bucking traditional trends and choosing to rent a home later in life. By catering to this set of renters, build-to-rent operators can increase living standards and provide a new market for an emerging rental demographic.
To get Phil Spencer’s advice direct to your inbox subscribe to our newsletter
Last Updated: January 16th, 2023