The lender’s Growth of Later Life Tenants report showed the number of households in England with tenants aged 55 to 64 increased 118 per cent since 2009/10, while tenants aged over 65 rose 93 per cent.
Respectively, these groups currently make up 327,000 and 249,000 households in the PRS, a collective share of 16 per cent.
This rate of growth seen across those aged between 55 and 64 was nearly double that recorded in 35-44 year-old tenants, which were the second fastest growing segment with a 66 per cent increase in the last 10 years accounting for 943,000 households.
Although, the increase of tenants aged between 25-34 was the second slowest at 23 per cent, this age group currently makes up the largest share of rented accommodation, accounting for 1.1 million households.
Paragon found landlords were responding to the shift in demand, with 21 per cent of landlords expecting to let more to older singles in the future and 20 per cent preparing to let to retirees. This was second only to letting to professionals or executives and companies.
Ownership vs renting
When it came to what attracted them to renting, 39 per cent of over 55s said they did not have a mortgage deposit and a fifth said they did not want the responsibility of home ownership.
Some 68 per cent of over 55s said renting suited their needs or they enjoyed it, compared with 49 per cent in the under 55 group. Additionally, 63 per cent of over 55s said they were happy they did not have to worry about repairs.
Shying away from the responsibilities associated with ownership was less prevalent among younger respondents as just nine per cent of those under 55 cited this as a reason to rent.
Those aged over 55 were less likely to want to own their homes at all, the research found, as 55 per cent responded to the survey saying so compared to 81 per cent of under 55s.
Of the over 55s who did aspire to own a property, 62 per cent believed they would not be able to afford it while a fifth said it would be possible in the next two years.
This is likely due to them having lower incomes as although 90 per cent of over 65s are retired, four per cent are working full time and five per cent are in part time work.
Despite earning less, over 65s were not as likely to struggle to pay rent. While 18 per cent of this age group said they had difficulties doing so, a third of those aged 34-64 and a fifth of those aged under 34 had difficulties paying rent.
Half of the tenants aged 55 and over have lived in only one or two rented properties, and of those who have lived in only one property, 46 per cent have lived there for 10 years or more.
The average length of time tenants tend to live in PRS accommodation is 13 years.
Paragon Bank managing director of mortgages Richard Rowntree said: “There are a number of factors that may have contributed to the increase in over 55s in the PRS over the past 10 years, such as rising divorce among older people, poorer pension returns and men living longer.
“With the number of over 55s forecast to rise from 30 per cent of the population to 36 per cent by 2043 and new household formation predicted to be driven by older, single person households, the PRS will have an increasingly important role to play in providing a home for older tenants.”
He added: “Landlords will need to consider longer tenancy agreements, the location of their property and any adjustments the property may need for later life tenants.”