Yes, I said
‘rentirement’,
not retirement ... rentirement and it relates to the 1,161 (and growing) Warrington
people, who don’t own their own Warrington home but rent their home, privately
from a buy to let landlord and who are currently in their 50’s and early to mid-60’s.
The truth is
that these Warrington people are prospectively soon to retire with little more
than their state pension of £155.95 per week, probably with a small private
pension of a couple of hundred pounds a month, meaning the average Warrington
retiree can expect to retire on about £200 a week once they retire at 67.
The average
rent in Warrington is £651 a month, so a lot of the retirement “income” will be
taken up in rent, meaning the remainder will have to be paid for out their
savings or the taxpayer will have to stump up the bill (and with life
expectancy currently in the mid to late 80’s, that is quite a big bill … a total of £181,394,640 over the next 20 years to be paid from the tenant’s
savings or the taxpayers coffers to be precise!
You might
say it’s not fair for Warrington tax payers to pick up the bill and that these
mature Warrington renters should start saving thousands of
pounds a year now to be able to afford their rent in retirement. However, in many circumstances, the reason
these people are privately renting in the first place is that they were never
able to find the money for a mortgage deposit on their home in the first place,
or didn’t earn enough to qualify for a mortgage …and now as they approach
retirement with hope of a nice council bungalow, that hope is diminishing because
of the council house sell off in the 1980’s!
For a
change, the Warrington 30 to 40 somethings will be better off, as their parents
are more likely to be homeowners and cascade their equity down the line when
their parents pass away. For example,
that is what is happening in Europe where renting is common, the majority of
people rent in their 20’s, 30’s and 40’s, but by the time they hit 50’s and
60’s (and retirement), they will invest the money they have inherited from
their parents passing away and buy their own home.
So, what does
this all mean for buy to let landlords in Warrington?
Have you
noticed how the new homes builders don’t build bungalows anymore ... in fact
some would said the ‘bungalow storey’ is over. The waning in the number
of bungalows being built has more to do with supply than demand. The fact is that for new homes builders there
is more money in constructing houses than there is in constructing bungalows. Bungalows are voracious when it comes to land
they need as because bungalow has a larger footprint for the same amount of
square meterage as a two/three storey house due to the fact they are on one
level instead of two or three.
That means, as demand will continue to rise for bungalows supply
will remain the same. We all know what
happens when demand outs strips supply … prices (i.e. rents) for bungalows will inevitably go up.
Email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on G5, Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.
Don't forget to visit the links below to view back dated deals and Warrington Property News.
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