A greater number of young Britons are choosing to invest in property than ever before. According to new research from Paragon Bank, the average buy-to-let investor in the UK is getting younger, with nearly a third of new buy-to-let mortgages now held by those in their 30s, and an increasing number in their 20s. There are now nearly a hundred thousand buy-to-let landlords in the UK aged under 30.
This research confirms the findings by estate agent John Minnis, who reported that a greater number of those aged under 35 are now choosing to invest their earnings or inheritance in UK property, seeing the housing market as a pathway to a more stable income stream.
Why now?
Traditionally, property wealth is accumulated over time, with the majority of property investors aged over 45. Those in their 20s and 30s have instead been focused on saving for their own home, paying for childcare or school fees, and more immediate needs with anything leftover put in the stock market.
Today, however, the global stock market is volatile, and with rents surging, especially in the capital, young people are increasingly attracted by the idea of investing in property as a way to grow their wealth.
Moreover, due to the high property costs, high deposit requirements, and stubbornly high mortgage rates, young people have started to view property investment as a more viable financial strategy than homeownership.
John Minnis commented on his findings: “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.”
In their report titled, ‘Who are the next generation of landlords?’ Paragon Bank notes that the fact that “demand for privately rented property significantly outweighs supply” and the opportunity that offers as a major factor in why new investors are choosing to invest in buy-to-let. However, the most important factor in choosing to invest in UK property, according to more than two thirds of respondents, was that property was a “tangible asset” with people increasingly concerned about fluctuations in the stock market and turning to “bricks-and-mortar” to diversify their investments.
Passive income
Interest in generating a “passive income” has been on the rise for the last two decades in the UK, coinciding with stagnating wage growth since the 2008 financial crisis. Young people in particular are looking for ways to supplement their wages with a side hustle or passive income and see property investment as a way to achieve these goals.
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Is there a better way to invest in UK property?
Buy-to-let may be the most well-known way to invest in UK property, but there are other ways to gain exposure to the UK property market that offer investors strong yields without any of the financial burdens and time commitments.
Housemartin offers investors the opportunity to enjoy yields of up to 7.69% on investments where the rents go up with inflation and leases for between five and 20 years. Moreover, as the leases are held by charities and housing associations to provide homes for vulnerable people, investors both make a social impact and benefit from more reliable tenants. Even better, investments on Housemartin can be made via an ISA, so investors can enjoy both a monthly income and any capital gains tax-free.
Investing in UK property has never been so easy. Sign up to Housemartin today.