"The evidence suggests that the demographics of private renters is shifting and that the profile of tenants is getting older."
A survey of over 1,300 tenants in the private rented sector (PRS) showed that currently 3% of people live in a bungalow, but 9% of respondents expect to rent this type of property in 10 to 15 years’ time.
The increase correlates with a forecast increase in older tenants living in rented homes over the same period.
Homes headed by a person over the age of 55 will account for over a quarter of all privately renting households by 2035, analysis conducted on behalf of Paragon Bank by the Social Market Foundation found.
Its report, ‘Where next for the private rented sector?’, found that 18% of households currently private renting are headed by somebody aged 55 or over. This will rise to 27% of households by 2035 according to the SMF’s projections.
The Government’s English Housing Survey shows there are currently 141,000 bungalows in the PRS in England, representing 3.3% of the total number of rented homes. Buy-to-let lending figures show strong growth in the number of bungalows purchased by landlords over the past five years, although they still remain low as a proportion of total properties acquired.
Last year, landlords purchased 3,370 bungalows with a buy-to-let mortgage, compared to 1,844 in 2017.
Another significant shift in property type was semi-detached homes. Currently 20% of tenants said they rent this type of property, with 25% forecasting they will rent semi-detached homes in the future.
Conversely, terraced homes and flats are forecast to experience falls. Just under a third (30%) of tenants today live in a terraced home, with 20% saying they expect to rent this type of property in the future. Flats, meanwhile, are currently home to 40% of tenants, with 30% of people saying they expect to be renting this type of home in 10 years.
Richard Rowntree, managing director of mortgages at Paragon, said: “The evidence suggests that the demographics of private renters is shifting and that the profile of tenants is getting older. There is a growing proportion of people who will rent property for their entire lives, whilst we have also seen growth in the number of people who have sold property and have gone into rented homes.
“The challenge for landlords is providing the right homes for older tenants. Bungalows are typically regarded as unfashionable, but they offer practical benefits for people who may not be as mobile as they once were and certainly have their place in the PRS. We would expect to see an increase in this type of property, as well as homes specifically targeting older tenants, over the next 10 to 15 years. Landlords are not yet buying this type of property in scale, but we would expect that to accelerate to match forecast levels of tenant demand for bungalows in future.”