Paragon Bank, has unveiled a study revealing the primary motivations driving aspiring landlords to expand their property portfolios. According to their latest report, The Next Generation Landlord Report, long-term tenant demand and the desire to supplement retirement income are the leading factors behind this trend.
The report, which surveyed 500 landlords with up to three properties, highlights the increasing appeal of property investment as a means of securing long-term wealth. Among the key findings, a significant 60% of landlords pointed to sustained rental demand as a crucial influence on their decision to grow their portfolios.
Retirement planning and capital growth
In addition to the focus on rental demand, over half of the respondents (54%) expressed a desire to bolster their retirement income through property investment. Nearly half (47%) of the surveyed landlords also cited long-term house price appreciation as a vital factor in their investment strategies.
Louisa Sedgwick, Managing Director of Mortgages at Paragon Bank, commented: “The rental market is set for continued growth, driven by projected population increases of around 10% over the next decade. This favourable market outlook is underpinning the investment decisions of aspiring landlords.”
The role of family and accidental landlords
The report also explores the various influences that lead individuals to enter the rental market. It reveals that 43% of landlords were motivated by friends and family to start their property ventures, while a notable 39% began renting out their first property by accident, often after purchasing a second home or inheriting property.
Sedgwick added: “The rental market is attracting a growing number of landlords who are inspired by their friends and family or who have discovered the benefits of property ownership through other circumstances. These aspiring landlords are committed to providing rental homes for the future and require a supportive regulatory and fiscal environment to continue their investment activities.”
Future prospects for landlords
As more individuals recognise the wealth-building potential of property, the preference for tangible assets remains strong. Over a third of landlords (34%) favour property investment over other options, drawn by its long-term value and the possibility of passing it on as an inheritance.
