Renting, in general, is trending upwards across the UK. Consistent house price increases, pay rise stagnation, and a prevailing shift in attitude towards renting are all factors in the UK’s rental market growth. Despite this, many of us still think of renting as something you do when you’re young.
Renting in retirement, however, is on the up, too. While it’s important to point out that many renters of pensionable age would rather be homeowners if they could afford it, many are opting to rent in retirement with the luxury of choice. In today’s post, we’re going to look into the pros and cons of doing so.
Let’s get started, shall we?
Renting in retirement vs. home ownership
Making a decision of this magnitude will undoubtedly throw up arguments for and against, and much will come down to personal circumstances when making your final choice.
That being said, there are a number of pros and cons for renting in retirement that will prove to be pretty universal, and it’s those that we’re going to dive into below:
Pros of retirement renting
- Mortgage-Free: You will, of course, still have to pay rent, but you won’t be tied to a mortgage if you choose to rent in retirement. This brings a degree of flexibility to your life, allowing you to move closer to your kids and grandchildren or it could give you the freedom to explore areas you’ve always wanted to live in relatively risk-free.
- Release Equity: If you are currently a homeowner approaching retirement, you won’t be alone if you decide to release the equity you’ve built by selling up and renting instead. Released equity is frequently used to bolster pension pots, giving retirees greater freedom and the resources required to enjoy their retirement to the fullest.
- Fewer Hassles: Ask any homeowner and they’ll tell you that unexpected maintenance issues are one of the biggest downsides to owning your own property. Leaky roofs, broken boilers, and even less dramatic problems like dealing with general wear and tear can be tedious, expensive, and time consuming. Who wants to deal with that in their retirement? By opting to rent instead, you’ll be handing over these hassles to your landlord, which can be a very alluring proposition indeed.
- Amenities: As the rental market grows, so too does the competition amongst landlords and developers to secure your tenancy. This has led to an explosion of facilities in rental complexes, with things such as gyms, swimming pools, communal rooftop terraces, and concierge services becoming more and more popular. For the most part, these additional amenities will be included in your rent, giving you the option to effectively use them free of charge and you’ll have them right on your doorstep.
- Warden-Assisted: For those in need of a little extra help, renting in retirement opens up the possibility of moving into a warden-assisted block or complex. These retirement housing blocks are especially beneficial for those with health problems or trouble with their mobility. Having a warden on site can also give loved ones peace of mind, too, which is something that may be lacking if their elderly relative lives alone in a property they own.
Cons of renting in retirement
- Rental Charges: Not having a mortgage hanging around your neck is a definite benefit, but rental charges still apply…and they can prove to be costly. The cost of renting has increased significantly of late, and there’s nothing stopping your landlord from putting your rent up as your tenancy proceeds.
- Insecurity: Although renting in retirement brings increased flexibility to your living arrangements, it also adds to your insecurity in equal measure. As you are not the owner of your home, you can effectively be asked to vacate the property when your tenancy comes to an end. With shorthold tenancies the norm, this could mean you’ll have to move more often than you’d like, and that could become old very quickly if it happens time and again.
- Pet Problems: Although attitudes are changing, many landlords are still reluctant to allow their tenants to keep pets in their properties. For some, this won’t be an issue, but for others it’ll be a deal-breaker. If you are an animal lover who has kept pets all your life, the chances are good that you’d like to continue doing so in retirement.
- Dead Money: Probably the most obvious ‘negative’ associated with renting (at any life stage) is the fact that the money you pay each month isn’t doing anything for your future self. Now, for retirees, this may be less of a concern than a twenty-something, but it’s still a factor that needs to be taken into consideration when weighing up the pros and cons of renting in retirement.
So, is renting on a pension something to consider?
It’ll come as no surprise to you that there’s no definitive answer that will suit everyone when it comes to choosing between renting in retirement or being a homeowner. However, putting it under consideration is an entirely different matter, and it’s certainly something to think about.
What will be right for one retiree will be the thing that puts another off, so you need to do your own homework. Go through the pros and cons above, but also take into consideration your own personal reasons as well.
Regardless of whether you’re a buyer or a seller, a landlord or a tenant, Petty Son and Prestwich can help transform your property dreams into reality.
Petty’s have been operating in London since 1908, and our team of friendly experts are always ready to welcome new clients into the family. Give us a call today to find out why we’ve stood out from the crowd for over a century.