Younger people (25-34 year olds) are investing in property at record levels – and are opting to invest in property over purchasing their own residential homes, according to estate agency firm John Minnis.
Due to high deposit requirements and mortgage rates, some young people are viewing property investment as a much more viable financial strategy than homeownership.
Paragon Bank indicates a decrease in the average age of buy-to-let landlords, driven by growth in the proportion of landlords in their 30s.
In 2023, 31% of new buy-to-let mortgages were acquired by those in their 30s, compared to 21% in 2014. Landlords aged 18-29 also saw an increase in their share of purchases.
John Minnis at John Minnis estate agents, said: “Many young people now view property investment as a much more viable financial strategy than homeownership.
“The younger generation looking to get into the property market is all to do with wealth building and financial security. In a time of increasing economic uncertainty and inflation, young people are seeking alternative ways to build wealth beyond traditional savings accounts and investments. Purchasing a second property allows them to leverage real estate as a long-term asset.
“With the growing demand for rental properties, especially in urban areas, many young investors see the potential to generate passive income by renting out their second property. The rental market has become more lucrative in recent years, providing a steady cash flow and helping to offset mortgage costs.”
Another notable trend amongst young people in the real estate market is a recent increase in those investing in a second property for renting or wealth building purposes.
Younger and first-time property investors take advantage of regions with affordability challenges where there are either lower property prices or strong rental demand to secure long-term financial stability.
Scotland, Northern Ireland, The Midlands and South-East London are amongst the most popular places to invest due to high rental demand and attract young buyers seeking strong returns.
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