"Until recent years, the market has worked well. But in a post-pandemic world, we’re experiencing a severe imbalance between supply & demand."
- Richard Rowntree, Managing Director of Mortgages at Paragon
Of those surveyed (500 landlords with up to three rental properties), the number of landlords buying buy-to-let (BTL) properties in their thirties has risen from 21% of total purchases in 2014 to 31% less than a decade later. Notably, those aged between 18-29 years old accounted for 10% of BTL mortgaged houses purchased in 2023, compared to 6% in 2014. Analysis of UK lending data suggests younger landlords are amongst the most active acquirers of new BTL property.
Landlords in their fifties have reduced from 29% of purchases to 20% across the same period, whilst those aged 60+ now account for just 7% of purchases. Those in their forties remain the dominant age group, accounting for 32% of BTL houses purchased last year, compared to 34% in 2014.
The average age of aspirational portfolio landlords is 37.8 years old, with the highest proportion of landlords aged between 25-34 years old (35%). In terms of gender, 59% are male versus 44% who’re female. The majority of landlords are in full-time employment (77%), followed by self-employment (11%), part-time employment (8%), retired (2%), and looking after a family at home (1%).
Individual flats (47%) are the most popular property type for aspirational portfolio landlords, closely followed by detached houses (36%) & semi-detached houses (36%). Terraced houses (26%), multi-unit blocks (14%), bungalows (11%), houses in multiple occupation (HMOs) (8%), and maisonettes (6%) were the less popular property types. Of those surveyed, nearly a third (32%) of landlords currently own one rental property, rising to 45% with two properties – only 24% own three rental properties.
Paragon found that 61% of properties were bought in partnership, whether that’s with a partner/spouse (46%), with a family member (7%), with a friend (4%), or with a business partner (4%). Only 44% of BTL properties with purchased by solo landlords. Notably, family & friends with existing property portfolios were a key driver (43%) for next-generation landlords to purchase their first property, followed by a desire to develop long-term rental income.
In terms of tenants, families and young couples are the most common tenant groups - of the landlords surveyed. Families with children made up 60% of tenants, followed by young couples (59%), white collar/professionals (38%), young singles (30%), older couples (21%), students (17%), older singles (16%), migrant workers (9%), local housing allowance (8%), retired (8%), executive/company lets (7%), and other benefits (4%).
“It’s vital that the UK has a thriving private rental sector (PRS). Everyone who needs or wants to rent a home should have access to a good quality property at a reasonable price. Until recent years, the market has worked well. But in a post-pandemic world, we’re experiencing a severe imbalance between supply & demand,” explained Richard Rowntree, Managing Director of Mortgages at Paragon.
He said: “The PRS need a consistent flow of new landlords coming into the sector, those with aspirations to develop the portfolios of the future. Our analysis of industry data shows that over the past decade, the average age of landlords purchasing a BTL property with a mortgage has fallen.
“This is encouraging as it highlights that property investment is still viewed as an attractive asset class by a demographic with so many investment opportunities competing for their capital,” Richard added.
Louisa Sedgwick, Managing Director of Mortgages at Paragon, highlighted that the rental market is set to continue growing, “driven by projected population increases of around 10% over the next decade. This favourable market outlook is underpinning the investment decisions of aspiring landlords.”
"The research also demonstrates a clear focus on long-term planning, with over half of landlords building portfolios to support their retirement. This indicates a strong commitment to the rental sector and is essential for the overall health of the private rented market,” she concluded.
