There’s no denying it, we’re getting older – by 2040 pensioner headed households will make up 36% of the population, up from 28% now. However, some parts of the country will be far younger than others and this matters because places with a younger population have bigger private rental markets and are also more likely to see a higher price appreciation. The five charts below outline this.

The number of pensioners per 1000 working age people will rise from 280 today to 364 in 2020. according to data from the Office of National Statistics

All regions will be affected more or less equally, but some are starting out much younger than others. The South West and the North East will continue to be the oldest part of the country while London will remain the youngest, followed by the West Midlands and the North West

What does this mean for property investment? Places with younger people are more likely to see greater price appreciation. The chart below plots the dependency ratio in 2016 to the change in median property price from 2010-2019 for each local authority. The lower the dependency ratio, the higher the price appreciation

In addition, currently 29% of households are headed by people over 65, but they only form 8.4% of private renters. Most renters are aged 25 to 44 and this is the market landlords should be targeting to minimise voids

So where do we find these younger markets? Mostly in inner cities as you’d expect, but some are younger than others. The interactive map below colour codes local authority areas by their dependency ratios in 2020, 2030 and 2040 (use the layers icon in the top right corner to choose a year)

England – Dependency Ratio (Pensioners/1000 Working Age People) by Local Authority

London and Manchester are the youngest cities, but will age rapidly over the next 20 years – the last column of the table above shows the change in dependency ratio from 2020-2040. Coventry and Bristol are two relatively young major cities whose dependency ratio will increase only slightly (5.8% and 7.5% respectively).

The final map shows the percentage change in the dependency ratio from 2020-2040 – the places that are going to age the most rapidly.

England – Change in Dependency Ratio (Pensioners/1000 Working Age People) 2020-2040 by Local Authority

While London will age rapidly, it will continue to have the lowest dependency ratio because it is starting from a low base. Places like Harrogate on the other hand already have a high ratio and will age rapidly (from 385 to 592 pensioners/1000 working age people in Harrogate)

In short, stick to cities while investing for the future. Outside of London, Coventry, Bristol, Manchester, Nottingham and Birmingham (in approximately that order) are likely to offer a steady supply of tenants over the long term.

Want to see where young people are moving to? See Internal Migration Within England