Younger Investors Fuelling Buy-to-Let Market Boom

Landlords in their 30s are driving significant growth in the Buy-to-Let (BTL) market, as industry data reveals a notable decline in the average age of BTL investors acquiring new properties with mortgages.

A report by Paragon Bank shows that the average age of investors dropped from 46.4 years in 2014 to 42.9 years in 2023. This trend is primarily due to a surge in purchases by younger demographics. Landlords in their 30s accounted for just 21% of purchases in 2014, but this figure increased to 31% last year.

Younger Landlords Leading the Charge

Richard Rowntree, Paragon’s Managing Director of Mortgages, noted: “There is a common belief that Buy-to-Let landlords are an ageing group, but the majority of new purchases are now by landlords under the age of 50.

“This demographic made up nearly three-quarters of all Buy-to-Let purchases last year, demonstrating strong investor interest in rental properties among younger landlords.”

Rowntree added: “There has also been a significant rise in the number of landlords in their 20s and 30s buying properties. These individuals are poised to become the portfolio landlords of the future.

“With the population expected to grow by 10% and significant demographic shifts, it is crucial to increase the stock of rental homes to meet demand.

“These younger landlords need a stable fiscal and regulatory environment to continue investing in the sector.”

Smaller Portfolio Landlords Expanding

The bank’s ‘Next Generation Landlord Report’ also explores the ambitions of smaller portfolio landlords seeking to expand their holdings. While the proportion of landlords in their 40s acquiring new properties remained stable, there was a noticeable decline in purchases by those in their 50s and 60s.

The percentage of Buy-to-Let purchases by landlords in their 50s fell from 29% in 2014 to 20% in 2023. Similarly, investors in their 60s saw their share of purchases decrease from 10% to just 6%. Landlords aged 18 to 29 accounted for 6% of purchases in 2014, rising to 10% last year.

A survey of 500 landlords with up to three properties and plans to expand their portfolios revealed an average age of 37.8 years. The largest group within this demographic was those aged between 25 and 34 (35%), followed by those aged 35 to 44 (31%).