New research also explores the factors influencing landlords' decisions to enter the rental market
Buy-to-let lender Paragon Bank has identified long-term tenant demand and the desire to supplement retirement income as the main motivators for landlords seeking to expand their property portfolios.
The findings are part of the specialist lender’s latest study, The Next Generation Landlord Report, which surveyed 500 landlords with up to three properties who aim to grow their portfolios. The report highlights a trend of landlords focused on increasing rental income and building long-term wealth.
According to the study, 60% of landlords cited sustained demand for rental properties as a key factor in their decision to expand their portfolios. More than half, or 54%, of landlords are adding properties to supplement their retirement income.
Long-term house price growth is another significant driver, with 47% of respondents viewing it as a crucial factor in their investment decisions. Meanwhile, 34% of landlords prefer property as an investment asset over other options.
“The rental market is set for continued growth, driven by projected population increases of around 10% over the next decade,” said Louisa Sedgwick (pictured), managing director of mortgages at Paragon Bank. “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.”
The Paragon Bank report also explores the factors influencing landlords’ decisions to enter the rental market. For many, friends and family played a significant role, with 43% citing them as a primary motivation, while 39% of landlords began renting out their first property by accident, often after purchasing a second home or inheriting property.
When choosing property over other investments, landlords emphasised its tangible nature, wealth-building potential, and its ability to be passed on as an inheritance.
“The rental market is attracting a growing number of landlords who are inspired by their friends and family or who have discovered the benefits of property ownership through other circumstances,” Sedgwick said. “These aspiring landlords are committed to providing rental homes for the future and require a supportive regulatory and fiscal environment to continue their investment activities.”
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