Landlords Are Getting Younger - don't let tax changes...

Our data reveals a striking trend: landlords buying property are getting younger.

The average age of landlords purchasing with a buy-to-let mortgage has plummeted from 46.4 in 2014 to 42.9 last year.

Our analysis of industry data shows that property is still attractive to younger investors. Landlords in their 30s have surged from 21% of mortgaged purchases to 31% in a decade, while those aged 18-29 now account for 10% of purchases.

Whilst this could be attributed to a greater frequency of cash purchases by more mature landlords, the popularity of buy-to-let with a younger audience underscores property's enduring appeal as an investment, even in today's diverse financial landscape.

We surveyed over 500 landlords with aspirations to develop property portfolios for our new Next Generation Landlord Report.

This research revealed that they're drawn to property's tangible nature, long-term rental demand and pension potential.

These younger landlords today are making standard buy-to-let purchases – flats and terraced homes – but are showing demand for more ambitious, complex propositions like HMOs and multi-unit blocks in the future.

I was buoyed by the survey’s findings, as well as the broader popularity of property investment with a younger demographic. As a buy-to-let lender, that would of course be expected. However, for wider society, it is also important.

One in five households in England rents a home. With the population growing and forecast to expand by around 10% over the next 10 to 15 years, we need more rental stock just to stand still.

Of course, build-to-rent will play a role in that, but it remains a small percentage of overall stock and is likely to do so for generations to come, despite the acceleration in completed units.

With the new Government strapped for cash and unlikely to have the funds to invest in a significant social housing programme, it will be private landlords who remain the central source of rental housing provision.

Therefore, the sector needs fresh investment and a new band of committed landlords to help grow the market overall.

There is competition for capital and property needs to remain an attractive investment. Landlords need progressive regulatory and fiscal policies to encourage that investment.

We are yet to see the details of the Renters’ Rights Bill, but I would urge the new Government to remember the requirements of landlords when designing this legislation and not just tenants. I would also urge caution on introducing punitive Capital Gains Tax changes that remove the incentive for landlords to invest in and hold property for the long term.

Finally, we need a sensible and realistic approach to upgrading the energy efficiency of rental homes. A blunt deadline approach won’t work, particularly if it doesn’t consider sustainability in the round, including the skills and labour resource required to carry out necessary works.

This new generation of landlords needs to be nurtured and encouraged. As a society, we cannot afford for a barrage of new legislation to scare them away.

* Louisa Sedgwick is the new director of mortgages at Paragon Mortgages *

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