The profile of the UK's buy-to-let landlord population is set to change significantly over the coming decade, with Millennials and Gen Z projected to account for 62% of landlords within ten years, according to research commissioned by Rely, the buy-to-let lending brand of OSB Group.
The Next Gen Landlords research, conducted with demographic consultancy Trajectory, finds that Baby Boomers and Generation X currently account for 54% of landlords. Within a decade, that share is projected to fall to 37%, as Millennials rise to 44% of the market and Gen Z reaches 18%.
The overall size of the private rented sector, which houses around one in five UK households, is expected to remain stable. What changes, according to the research, is the profile of those running it.
The incoming generation is also projected to be more diverse. Ethnic minority representation among landlords is forecast to more than double from 11% to 23%, while the proportion of female landlords is expected to rise from 36% to 42%.
Inheritance replaces savings as the entry route
The most significant shift identified by the research concerns how next-generation landlords will enter the market. More than a third of aspiring next-gen landlords (36%) expect to inherit property they will rent out, with a further 21% anticipating they will inherit capital to fund a rental property purchase. By comparison, 27% of current landlords entered through savings.
For the intermediary market, the research suggests clients arriving via inheritance may require broader financial planning guidance rather than a straightforward lending product from the outset.
Smaller portfolios, longer hold periods
The next-generation landlord is expected to enter with a smaller initial portfolio than their predecessors, building incrementally rather than acquiring quickly. Hold periods are also projected to be longer, with succession considerations featuring earlier in the ownership journey. The Rely and Trajectory research finds that 50% of future landlords plan to pass their property to family when they eventually exit, compared with 42% of current landlords.
The research also suggests financial returns are not the sole motivation for this cohort. Among current landlords, 82% describe their tenant relationships as positive, and 55% report spending more time thinking about the tenant experience, a finding the research presents as indicative of the values the next generation will bring to the sector.
Jon Hall, group chief commercial officer at OSB Group (pictured), said the findings point to a materially different client profile for brokers over the coming years. "The landlords entering the market over the next decade won't necessarily look like the ones brokers have worked with over the last twenty years," he said.
"More will be coming into the sector through inheritance, many will start with smaller portfolios, and they'll often be looking at property as a long-term family asset rather than simply an investment."
Hall said the shift would change the nature of conversations between brokers and clients. "Advice will increasingly be about understanding someone's individual circumstances and helping them make the right decisions from day one, whether that's financing an inherited property, buying a first investment property or planning how to grow a portfolio over time," he explained.
"As those journeys become more personal, the value of specialist advice only grows. Technology has an important role to play in making lending quicker and easier, but it can't replace the judgement, experience and conversations that help brokers navigate more complex cases; it needs to complement them."
"The lenders and brokers that will succeed in this next chapter won't simply have the fastest processes," Hall added. "They'll be the ones that combine great technology with the expertise and relationships that brokers and landlords rely on when it really matters."
