Much of the conversation around the private rented sector focuses on regulation, taxation and interest rates. Those issues remain important, but another shift is emerging that could prove just as significant in the years ahead: the changing route into landlording.
Recent Landlord Trends research from Pegasus Insight shows the average landlord is now 63 years old and has more than 19 years’ experience in the sector. Nearly half are retired, highlighting just how established much of today’s landlord base has become. At the same time, 43% of landlords say they intend to sell property in the next 12 months, while only 6% plan to buy, raising important questions about who will replace them in the years ahead.
Speaking to brokers across the country, one of the themes I’m hearing more often is that landlord enquiries don’t always fit the mould they once did. It’s no longer just about helping an experienced investor finance their next purchase. Increasingly, brokers are supporting clients who have inherited property, are considering what to do with family assets or are exploring buy to let as part of a much broader long-term financial plan. Alongside experienced portfolio landlords, we’re seeing more first-time investors entering the market with circumstances and priorities that differ significantly from previous generations.
This sits at the heart of Rely’s new Next Gen Landlords research, which points to a new generation of landlords entering the sector through different routes, with different ownership ambitions and a longer-term outlook than the generation they are replacing.
The research found that 36% of aspiring next generation landlords expect to inherit property, compared with 27% of landlords today, while 50% expect to pass property on to family members when they eventually exit the sector, compared with 42% of current landlords. Together, those findings point to a market placing greater emphasis on long-term ownership and intergenerational transfer.
For many landlords operating today, buy-to-let began with a straightforward ambition: purchase a property, generate an income and gradually build a portfolio over time. Our Next Gen research points to a different future, with more than a third of aspiring landlords expecting to inherit rental property, 21% expecting to inherit funds that could be used to purchase rental property and 13% expecting to inherit an existing rental business. Rather than spending years acquiring assets one by one, many of those entering the market in future are likely to begin their journey already owning property and facing decisions about how best to manage, finance and develop it.
This changes the nature of the conversation for brokers. Someone inheriting a property may never have planned to become a landlord, yet could suddenly find themselves making decisions about ownership structures, finance and long-term investment strategy. We’re already seeing advisers help clients assess inherited assets, navigate succession planning and determine how property fits within their wider financial objectives, often before any discussion around financing a future purchase takes place. These situations can also raise tax considerations, making it important for borrowers to have access to the right professional advice from the outset.
Evidence of this increasingly deliberate approach can already be seen in today’s market. Pegasus Insight research found that two-thirds of landlords used a broker for their most recent mortgage transaction, while four in five limited company landlords describe themselves as intentional landlords, highlighting a sector that is taking a more strategic and professional approach to property ownership.
From my perspective, this is one of the most encouraging aspects of the research. The next generation is not approaching property investment casually. They recognise the responsibilities that come with being a landlord and understand the value of specialist support, whether that’s from brokers, lenders, accountants or letting agents.
Over the years I’ve seen first-hand how the market continually adapts to change. While those entering the sector today may not follow the same path as landlords who started their journey 20 or 30 years ago, the need for trusted advice remains exactly the same.
The next generation won’t become landlords in the same way their parents did. Many won’t spend years building portfolios one property at a time. Instead, they may inherit assets, enter the market with different objectives and view property as part of a wider wealth strategy. Understanding those changes will be every bit as important as understanding the needs of the landlords who shaped the sector we know today.
