In conversation with our head of surveying recently, we discussed how his team has seen a noticeable increase in younger landlords. Our analysis of industry data shows how this is a long-term shift and is evident across the wider market.
In 2014, 15% of buy-to-let mortgaged properties were purchased by 18–34-year-olds. In the 10 years that have followed, this proportion has increased to 22%. As a result, the average age of landlords purchasing buy-to-let properties fallen from 46 to 43 during the period.
This is a reassuring finding because it’s quite feasible that some of those early adopters of buy-to-let mortgages back in the mid-90s will now be approaching an age where they are eyeing retirement or succession.
It’s a transition we must manage carefully to not disrupt supply to the rental sector, but I’m encouraged by the fact that younger landlords still consider property a sound investment.
Rental property remains a service very much in demand – Zoopla recently revealed there are 12 would-be tenants for every available privately rented property and investors favour the long-term stable returns that property can offer.
We have seen lots of ups and downs in the swaps market, meaning lenders must be agile in pricing products, but rates have broadly fallen since the highs we saw in 2023, more mortgages are available to borrowers and lending criteria has become more flexible.
UK Finance figures, covering Q4 2024, illustrate how this has helped fuel a 47.2 per cent year on year increase in new buy-to-let loan advances to £9.6 billion. Industry data also shows that this momentum has continued into 2025, with lending in the first quarter of the year surpassing that of Q4 2024 to record further year-on-year increases.
The returns remain too; our own lending figures recently highlighted a 14-year high in yields. While house price inflation has cooled in more recent years, the ongoing supply-demand imbalance means rents have continued to rise.
And while the maturity of buy-to-let means that there are plenty of experienced landlords that know the private rented sector inside out, we need to nurture those that are new and keen to grow.
We can do this in a number of ways, with one of the most obvious being education.
The sector is governed by a dizzying number of regulations and the impending Renter’s Rights Bill and proposed changes to minimum energy efficiency standards will amount to the biggest overhaul in decades, if not ever. We’ve been working with industry bodies, calling for the regulations needed for a fair and functioning private rented sector (PRS), but for brokers, this could be something as simple as making landlords aware of the rules that may have the greatest impact on their business now and in future.
Another important aspect of supporting the next generation of landlords is leveraging technology to facilitate a slick digital experience. Growing up in a digital age means it is something that these landlords will expect from their brokers and lenders can play a part in enabling this.
As part of a company-wide digital transformation strategy, we’ve recently overhauled our mortgage application system to provide a faster, smarter and more flexible user experience. We’re excited in what this system can deliver and will be rolling out a number of initiatives in the coming months to better serve those newer landlords growing portfolios.
While our enhancements are very much focussed on our broker platform, which was developed in-house with close collaboration, it shows the direction of travel in the sector with lenders increasingly using technology to streamline the application process.
These are just two of many examples of how the PRS has evolved and will continue to do so. With rented homes a central component of the UK’s housing provision, it is crucial that the next generation of landlords are supported to provide them.
Louisa Sedgwick is managing director of mortgages at Paragon Bank
