Paragon Bank’s recent analysis reveals a significant demographic shift in the buy-to-let market, with the average age of landlords acquiring new rental properties with mortgages dropping over the past decade.
Data from the specialist lender shows that the average age of buy-to-let landlords securing new properties with a mortgage decreased from 46.4 years in 2014 to 42.9 years in 2023. This decline is primarily attributed to a surge in property purchases by landlords in their 30s. In 2014, only 21% of buy-to-let mortgages were taken out by this age group, a figure that climbed to 31% last year.
Paragon’s comprehensive Next Generation Landlord Report, which explores the ambitions of landlords owning one to three properties who plan to expand, offers detailed insights into these trends. The report highlights that while the proportion of landlords in their 40s has remained stable—34% in 2014 versus 32% in 2023—there has been a marked decrease in the number of landlords in their 50s and 60s entering the market. Landlords in their 50s made up 29% of purchases in 2014, a figure that dropped to 20% in 2023. Similarly, those in their 60s decreased from 10% to 6%. Conversely, landlords aged 18 to 29 saw their share increase from 6% in 2014 to 10% last year.
Further research from Paragon indicates that the majority of aspiring future portfolio landlords are in their 30s. A survey of 500 landlords, each with up to three properties and a desire to expand their portfolios, revealed an average age of 37.8 years. The largest segment of this group fell within the 25 to 34 age range (35%), followed by those aged 35 to 44 (31%).
Richard Rowntree, Managing Director of Mortgages at Paragon Bank, commented on the findings: “There is a perception that buy-to-let landlords are an ageing group, but the majority of new purchases are concentrated in landlords under the age of 50. This group accounted for nearly three-quarters of all buy-to-let purchases last year, highlighting a strong investor appetite for rental property among younger landlords.”
Rowntree also noted the significant increase in property acquisitions by landlords in their 20s and 30s, predicting that these individuals will become the portfolio landlords of the future. “With forecast population growth of 10% and significant demographic changes, it’s vital we increase the stock of rental homes to keep pace with demand. These landlords need a stable fiscal and regulatory environment to encourage continued investment into the sector,” he emphasized.