Report finds at least 630,000 will be unable to afford private rents on their pension income.

More than 600,000 members of so-called ‘Generation Rent’ are facing an “inevitable catastrophe” of homelessness when they retire, according to the first government inquiry into what will happen to millennials in the UK who have been unable to get on the housing ladder as they age.

People’s incomes typically halve after retirement. Those in the private rented sector who pay 40% of their earnings in rent could be forced to spend up to 80% of their income on rent in retirement.

If rents rise at the same rate as earnings, the inquiry found that 52% of pensioners in the private rental sector will be paying more than 40% of their income on rent by 2038. This will mean that at least 630,000 millennials are unable to afford their rent.

They will find themselves homeless or with no choice but to move into temporary accommodation, at the state’s expense, according to the report by the all-party parliamentary group on housing and care for older people.

“The number of households in the private rented sector headed by someone aged over 64 will more than treble over the next 25 to 30 years,” said Richard Best, the chair of the group. “But unless at least 21,000 suitable homes are built a year, there will be nowhere affordable for them to live. The consequence is bound to be homelessness for some.”

The report also forecasts that, in terms of quality of accommodation, the number of older households living in unfit and unsuitable private rented accommodation could leap from about 56,000 to 188,000 in 20 years’ time and to 236,500 in 30 years’ time. And it warns that the UK is headed towards an ‘inevitable catastrophe for the pensioners of tomorrow”.

Substandard housing is already known to be a direct cause of death for many older people: at least 53,000 winter deaths of old people over the last five years have been attributed to conditions related to living in a cold home.

While retired people in social housing are more likely to live in affordable, decent homes, the report – Rental Housing for an Ageing Population – says there is not nearly enough of this housing even now.

“We see the likelihood of a significant shortfall in the available places within the current stock since, at present, few retirement schemes are being created,” said Lord Best.

The report calls for a national strategy to avoid a “crisis of pensioner homelessness”. The authors want to see least 38,000 new rental homes specifically for older people built over the next 30 years – more than 1.1 million extra homes by the late 2040s.

Brendan Sarsfield, the chief executive of Peabody, who was a member of the inquiry, said: “The problem with the private rented sector is that people think it is the solution. It isn’t. Insecure tenancies and expensive rents mean that very often it is not a suitable tenure for older people.

“Many older people today were lucky enough to be able to buy their own home and watch the value of it grow. But for the pensioners of tomorrow there is little chance of being able to do that,” he added. “The broken housing market and failure of past governments to adequately fund social housing means that we are going to see many more older people struggling to pay the rent.”

Kate Henderson, the chief executive of the National Housing Federation, said: “There is now a rapidly growing number of older people who are struggling just as much as the younger generation. This must be a wakeup call to the government that more money for building social housing, and especially housing that is fit for retirement, is desperately needed.

“Our latest research shows that the government must invest £12.8bn in building new social housing every year if they are to ensure all generations have somewhere secure and affordable to live.”

George McNamara, the director of policy and influencing at Independent Age, said: “Our research has shown that the lives of too many older renters are blighted by insecure tenancies, woeful living conditions, dealing with unscrupulous landlords and constant financial stress.”

Caroline Abrahams, the charity director of Age UK, agreed, adding: “The government needs to also invest more in good-quality social rented housing that offers security, affordability and independence to people who need it.”

Dr Rachael Docking, senior programme manager for homes at the Centre for Ageing Better, said: “We have an urgent challenge on our hands to prevent people in later life being pushed into poverty or trapped in unsuitable housing in the years to come.”

Polly Neate, the chief executive of Shelter, said: “This country is failing to build social homes at the rate we need them, leaving older generations who missed the homeownership boat with little choice but to rent privately.

“On top of being notoriously expensive and unstable, too many privately rented homes simply aren’t up to scratch either – condemning older people to live out their retirement in places which are cold, damp or infested with mice.”

The housing minister, Heather Wheeler, said: “We have given councils more than £2.7bn since 2012-13 so that people, including older and disabled people, can live independently and safely at home.

“The recent introduction of the Homes Act means a fairer deal for both tenants and landlords as we strengthen all tenants’ rights.”

This article first appeared in The Guardian  @byameliahill Wed 17 Jul 2019 15.00 AEST