The desire of tenants in the private rented sector to own a property falls from the age of 35, along with the propensity to save towards a deposit as tenants get older, research from Paragon Bank has revealed.
A survey of 2,000 tenants found that 72% of those in rented accommodation would like to own a property in the future. Those in the 25-34 age category have the greatest desire to buy a home, with 88% of tenants in this group saying they want to own a property in the future.
This falls to 70% within the 45-54 age group, with half of 55-64 year old tenants stating they want to buy a property. Only 34% of tenants in the 65 or age group want to buy in the future. According to UK Finance data, the average age of a first-time buyer in 2019 was 32.
The ability to save for a home also falls as tenants get older. Nearly three quarters (72) of tenants aged between 18-24 that want to own a home save regularly towards a deposit, with 71% of those aged between 25-34 saving regularly.
This falls successively for following age brackets: 58% for 35-44 year olds, 45% for those between 45-54 and 41% for 55-64 year olds. There is a slight uptick of 43% of those aged 65 or over who want to buy a home saving monthly to do so.
Richard Rowntree, Paragon Bank Managing Director of Mortgages, said: “Our research shows a strong desire to buy amongst younger tenants who will typically use rented property as a starter home before stepping on the property ladder. This cohort also is more able to save for a deposit, making their aim of buying a home more attainable.
“As tenants reach their middle-aged years, the desire to own a home becomes less pronounced, but so does the ability to save for a property. These tenants will typically stay in the private rented sector for a longer period, maybe for the rest of their lives.”
Paragon’s UK Tenant Report 2020 also shows that contrary to the perception of reluctant renters, over half of tenants (54%) state that renting either suits their current situation or that they enjoy renting. Reasons for that include not having to worry about repairs (48%), the flexibility to move easily (35%), great location (32%), being able to live in an area they couldn’t afford to buy (31%) and the property being perfect for them (22%).
Satisfaction with rented accommodation increases with age. Nearly seven in 10 (68%) of over 55s said that renting suited their needs or they enjoyed renting, compared with 49% in the under 55 group. Overall, the majority of tenants (59%) like they property they live in, although four in 10 think improvements are required.
Over six in 10 (62%) tenants state that the property feels like home, even if they don’t own it. Tenants also enjoy a strong relationship with landlords, with over half of tenants letting direct from their landlord and 39% letting via a letting agent. Overall, 68% stating that they have a positive working relationship with their landlord, 80% stating that their landlord is easy to contact, 65% report the landlord makes repairs promptly and 58% say that repairs are made to a good standard.
Richard Rowntree added: “We spoke to nearly 2,000 tenants in the PRS across the country about their experiences of renting and the results confirmed what we suspected. The tenant base is diverse – from young couples finding their first home together, to families, to people in later life who may live on their own – but it’s one that sees the benefits of the tenure.
“Of course, the UK is a nation of homeowners and many tenants naturally aspire to own their own property, particularly those in the younger age brackets, but people are generally happy in their rented home, recognise that it suits their needs and, on the whole, enjoy a good relationship with their landlord.”
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Paragon surveyed 2052 tenants in October 2020