OBR warns older renters pose financial risk as Generation Rent calls for rent caps

Older private renters represent a fiscal risk for the Treasury, warns the Office of Budget Responsibility (OBR).

A report by the OBR warns Britain’s ageing population will force more people to rent from the private rented sector.

Generation Rent is now calling on the government to limit rent increases for older private renters.

A fiscal risk

According to the OBR, the proportion of pensioners living in the private rented sector could rise from 6% to 17% by 2041, an additional 1.2 million people compared to today.

Of these around 400,000 could be eligible for pensioner housing benefit, at a cost of around £2 billion a year.

The OBR report warns older private renters pose a growing financial risk.

The report says: “Private renters represent a fiscal risk which is likely to rise as home ownership rates are falling and so more future pensioners are likely to live in private rented accommodation.

“Given housing assets are a key factor in determining eligibility for state support towards social care costs, growth in the private-renting pensioner population could have indirect fiscal costs too.”

Landlords swallowing up public money

Dan Wilson Craw, deputy chief executive of Generation Rent, told The Big Issue they welcome the OBR’s report.

He said: “Everyone needs a safe affordable home. So, it’s very welcome that the OBR has recognised the runaway train of retired private renters that is heading down the track.”

The tenant group then accuse landlords of “swallowing up public money” despite many landlords facing huge costs such as selective licensing and 41% of landlords earning less than £20,000.

Mr Craw adds: “Many middle-aged renters now have very little chance of buying a home before retirement.

“They’ll either face eking out their meagre pensions to stay on top of the rent, possibly even delaying their retirement, or need housing support, putting greater pressure on public finances, with billions of pounds of public money already being swallowed up by landlords each year.”

The tenant group then claims the way to stop the problem is through rent caps.

Mr Craw told The Big Issue: “All renters need limits on rent increases, but they would particularly help retired renters manage their fixed incomes.

“Now is also the time for the government to figure out how to get older renters into lower cost housing, whether that’s home ownership or social tenancies. We hope their forthcoming housing strategy will heed the OBR’s warnings.”