New research identifies the landlords of tomorrow
Brokers will need to broaden their approach to support a more diverse range of clients as age profiles, ethnic minority and gender representation change over the next decade.
Baby Boomers and Generation X currently account for more than half (54%) of landlords, but that figure is set to fall to just over a third (37%), with Millennials and Gen Z instead taking over. Millennials will account for 44% of the market, while Gen Z will comprise 18%.
Ethnic minority representation is expected to double from 11% to 23%, and female landlords to grow from 36% to 42%.
Reshaping broker conversations
Such structural shifts in the UK’s landlord population will reshape the buy-to-let finance market, according to buy-to-let lender Rely’s Next Gen Landlords research, conducted with demographic consultancy Trajectory.
It says that for the intermediary market, the biggest change is in how the next generation will enter the market, with more than a third (36%) of aspiring next gen landlords expecting to inherit property they can rent out, with a further 21% expecting to inherit capital they will use to purchase a rental property.
They are also expected to enter with a smaller initial portfolio than today’s landlords and to hold properties longer. Succession planning is also changing. 50% of future landlords plan to pass their property to family when they eventually exit, up from 42% of today’s landlords.
Jon Hall, group chief commercial officer at OSB Group, said: “The landlords entering the market over the next decade won’t necessarily look like the ones brokers have worked with over the last twenty years. More will be coming into the sector through inheritance, many will start with smaller portfolios, and they’ll often be looking at property as a long-term family asset rather than simply an investment.
A changing conversation
“That changes the conversations brokers should be having with clients. Advice will increasingly be about understanding someone’s individual circumstances and helping them make the right decisions from day one, whether that’s financing an inherited property, buying a first investment property or planning how to grow a portfolio over time.
“As those journeys become more personal, the value of specialist advice only grows. Technology has an important role to play in making lending quicker and easier, but it can’t replace the judgement, experience and conversations that help brokers navigate more complex cases. It needs to complement it.
“The lenders and brokers that will succeed in this next chapter won’t simply have the fastest processes. They’ll be the ones that combine great technology with the expertise and relationships that brokers and landlords rely on when it really matters,” he said.
