Boomers and Gen X (those born between 1946 and 1980) currently account for 54% of landlords, but this is expected to fall to 37% over the next 10 years. So, while it won’t be an overnight change, the figures are still expected to show a steady increase in younger generations taking over and/or entering the sector.
With Millennials predicted to make up 44% of landlords and Gen Z a further 18% within the next decade, according to research carried out by Rely (part of OSB Group.)
Rely surveyed 1,509 current and aspiring landlords to explore how the private rented sector could evolve over the coming decade.
The research also forecasts a significant increase in diversity across the sector. Ethnic minority representation among landlords is expected to more than double, rising from 11% to 23%, while the proportion of female landlords is projected to increase from 36% to 42%.
Younger landlords take a larger share of the market
Rely's Chief Commercial Officer, Jon Hall, says that the research suggests Britain’s private rented sector is not disappearing but undergoing a significant transformation, with a younger, more diverse and increasingly tenant-focused generation of landlords emerging.
This new generation is expected to approach property ownership with a stronger emphasis on professionalism, positive tenant relationships and providing good-quality homes.
Rather than viewing landlording purely as a financial decision, many see it as a responsibility, with a desire to raise standards across the sector and redefine what professional landlording looks like.
Inheritance to play bigger role in landlord succession
Inheritance is set to become an increasingly important route into property for the next generation of landlords, with one in three future landlords expecting to inherit a home that they can let out. This is up from the 27% of current landlords who say they entered the sector through inheriting a property.
Money is also expected to help younger landlords get started, with 21% of future landlords anticipating an inheritance they can invest in property. Meanwhile, 13% expect to take on an existing portfolio of four or more properties.
The trend could also continue into the next generation, with half of future landlords planning to pass property on to their own family when they eventually leave the sector, compared with 42% of current landlords.
Landlord priorities are changing
Landlords appear increasingly focused on maintaining strong relationships with their tenants, with 82% describing their relationship as positive, according to separate research by Landlord Leaders.
The findings suggest tenant experience is becoming a greater priority, with 55% of landlords saying they are devoting more time to it. Almost six in 10 (59%) have also engaged directly with tenants to gain a better understanding of what they want and need.
There are also signs of growing confidence across the sector. The number of landlords feeling optimistic about operating in the private rented sector has climbed to 62%, compared with 47% a year ago. A further quarter remain positive despite acknowledging the challenges facing landlords.
Mr Hall said the research points to a more improved private rented sector, with stronger landlord-tenant relationships and growing trust: "That future is not just possible... it is already taking shape.”
