Generational shift reshapes the buy-to-let market
Millennials are redefining the landscape of buy-to-let investing in England and Wales, now accounting for 50% of new shareholders in buy-to-let companies set up so far this year. The finding, drawn from an analysis of Companies House data by estate agent Hamptons, marks a notable generational shift in landlord demographics. It also comes as rents show modest declines, underscoring a housing market in transition.
Why millennials are entering buy-to-let in greater numbers
Despite widespread stigma around home ownership costs for younger generations, many millennials born between 1981 and 1996 are finding buy-to-let a viable route to build wealth and generate income. The latest data show that for the first time this year, millennials make up half of all new shareholders in buy-to-let entities, up from 40% five years ago.
Overall, three-quarters of shareholders in new buy-to-let companies are under 50, up from 68% a decade ago. While higher taxes and tighter regulations have prompted some landlords to exit the market, a strong influx of younger investors has helped sustain activity in new purchases.
Shifting geography: northward movement and regional diversification
The share of homes purchased by landlords across England and Wales remained steady year on year, even as the second home stamp duty surcharge rose to 5% from 3%. In the July-to-September quarter, London, the south-east, south-west and east of England accounted for 34% of investor purchases—well down from 50% in 2016—reflecting a broader geographic shift.
Investors are increasingly chasing higher yields in the north, where cheaper properties and stronger rent returns lure buyers. The north-east, for example, now sees landlords purchasing more than a quarter of homes sold there, compared with just 8% in London, illustrating a clear tilt toward regions offering better value and potential growth.
Rents: a cooling backdrop for buy-to-let
Hamptons reports the average rent for a newly let home in Britain fell by 0.3% in the year to September, reducing the monthly rent from £1,402 to £1,398. It marks a shift from the previous year’s 4.2% growth and was most pronounced in London, where rents slid 2.7% month-to-month and 4.6% in inner London, bringing average rents to £2,766 a month—£165 below the October 2024 peak.
Notably, rents on renewed contracts continued to rise, outpacing inflation with a 4.6% increase over the past year. That dynamic suggests a bifurcated market: new lettings soften while existing tenancies push up renewal income for landlords, echoing broader affordability pressures faced by tenants and investment strategies alike.
Implications for landlords, agents, and the housing market
The rise of millennial landlords aligns with a broader rebalancing in the private rented sector. Baby boomers—now in their 60s and 70s—are winding down portfolios or passing them on, while younger generations are taking the reins. Hamptons estimates that millennial landlords will create about 33,395 new buy-to-let companies this year—more than twice the number incorporated in 2020—indicating sustained appetite among younger investors despite regulatory headwinds.
This generational shift also aligns with a broader trend: baby boomers are exiting, Gen Z is entering, and investors are seeking markets with higher yields and more affordable entry points. The north’s appeal is evident in data showing higher landlord activity in regions where property prices are lower and rent returns more attractive.
Looking ahead
As the buy-to-let sector evolves, the split between new landlord entrants and those expanding portfolios will shape supply, rents, and housing affordability. The data suggest that while the number of new buy-to-let ventures grows, rent dynamics will continue to reflect local market conditions, landlord strategies, and regulatory environments. The coming years will reveal whether this millennial-led wave sustains momentum and whether regional shifts become a lasting feature of England and Wales’ rental landscape.
