The market of property investment in the UK is shifting, with inheritance set to become the primary avenue for aspiring landlords. A recent report indicates that a significant number of future landlords anticipate entering the rental market through inherited properties or funds, highlighting a notable change in how individuals will build their property portfolios.
How Are Future Landlords Planning to Enter the Market?
According to Rely’s Next Generation Landlord Playbook report, which surveyed over 1,500 current and aspiring landlords, 36% of hopeful landlords expect to inherit property suitable for rental. This contrasts sharply with the 27% of existing landlords who reported that inheritance was their route into the market. Additionally, 21% of future landlords anticipate inheriting money to purchase rental properties, while 13% expect to receive entire property portfolios from family members.
What Does This Mean for Current Landlords?
The shift towards inheritance as a primary means of entering the landlord market has implications for current property owners. Among existing landlords, 42% plan to transfer their business or properties to family members when exiting the market. This trend suggests a potential increase in family-owned rental properties, which could affect market dynamics and competition.
What Are the Implications for Brokers and Lenders?
As the profile of landlords evolves, brokers and lenders may need to adapt their services to cater to a new generation of landlords. Jon Hall, group chief commercial officer at OSB Group, noted that the landlords entering the market in the next decade will differ significantly from those brokers have worked with in the past 20 years. This change suggests that lenders and brokers who can streamline their processes and understand the needs of these new landlords will be better positioned for success.
What This Means for Aspiring Landlords
For those looking to enter the rental market, the reliance on inheritance could mean a more accessible path to property investment. With 27% of respondents indicating they would use savings and 21% planning to take out buy-to-let (BTL) mortgages, there are multiple avenues available for aspiring landlords. However, the expectation of inheriting property may also lead to increased competition in the rental market, as more individuals enter the sector with inherited assets.
Frequently asked questions
How can aspiring landlords prepare for the market?
Aspiring landlords should consider their financial options, including savings and potential BTL mortgages, while also staying informed about market trends and regulations to make informed investment decisions.
What impact will increased female participation have on the rental market?
The report predicts that the share of female landlords will rise from 36% to 42%, driven by greater financial independence. This shift could lead to a diversification of rental properties and management styles in the market.