The Intermediary – June 2025 - Flipbook - Page 37
BUY-TO-LET
Opinion
BTL still appeals
to Millennials
and Gen Z
T
here’s been no shortage
of headlines in recent
years suggesting that
the buy-to-let (BTL)
market is in decline.
Whether it’s rising
interest rates, tax changes, regulatory
hurdles or increasing operating costs,
there’s an endless conveyor belt of
factors that create a perception that
BTL no longer offers the same appeal.
At the same time, we’ve seen a
shi in the way younger generations
approach investment. The popularity
of retail investing and digital assets –
cryptocurrencies, NFTs – has grown
significantly, and we’re oen told that
the next wave of investors is opting for
liquidity and mobility when building
their investment portfolios.
As a result, there’s considerable
debate about whether traditional
assets are losing their appeal. But just
how accurate are these assumptions?
Is the BTL market genuinely being
le behind, or is there still underlying
demand among aspiring investors?
To explore these questions, Market
Financial Solutions commissioned
an independent survey of 2,000
UK adults, which assessed public
sentiment towards the BTL market
and property investment more
broadly – this is what we learned.
Driving demand
Despite the challenges facing
landlords, BTL remains a compelling
investment option for many
UK adults. For instance, 33% of
respondents want to own a BTL
property in the future. Notably, this
figure rises to 54% among those aged
18 to 34, and drops to just 14% among
those aged 55 and over.
While some of this disparity can be
aributed to older adults potentially
already being property owners or
landlords, it does illustrate that
younger people still regard BTL as a
goal worth pursuing.
In my view, it’s because of the wellestablished perception of bricks and
mortar as a safe, secure asset to invest
in. This is built on decades of data,
with people across the UK having seen
both property prices and rents march
upwards throughout their lifetimes.
The context in which the next wave
of investors grew up is also important.
From the Global Financial Crisis of
2008 to Brexit, the pandemic, and
the current inflationary and highrate environment, there has been no
shortage of volatility in the financial
markets. In contrast, property has
demonstrated remarkable resilience.
UK house prices have shown strong
growth over the past decade. Although
higher interest rates have impacted
buyers’ spending power in recent
years, prices have largely held firm.
It’s hardly surprising that 60%
of survey respondents believe that
property is a good way to build longterm wealth, while 37% would rather
invest in BTL than in stocks or shares.
Aligning with the mindset
A lack of supply and increasing
demand in the private rental sector
(PRS) means that rental yields have
also climbed steadily in the last decade
or so. As such, for investors seeking
both income and capital appreciation,
buy-to-let offers dual benefits that few
other asset classes can match.
For younger investors, this
combination is aractive. In recent
years, the ideas of ‘passive income’ and
‘side hustles’ have become increasingly
popular, especially on social media.
Now, managing a rental property
is by no means a passive activity, but
with the help of third-parties, it can be
done alongside a regular nine-to-five.
PARESH RAJA
is CEO at Market
Financial Solutions
As such, BTL offers a stable option
for investors seeking to increase and
diversify their income streams beyond
their salaried jobs.
Supporting this, our research
revealed that 81% of UK adults who
want to invest in a BTL property
would ideally use the rental income to
support – not replace – their primary
income or retirement plans.
Implications for brokers
BTL investments have been labelled
as increasingly unappealing in recent
years, but this is far from the truth.
The rise in house prices and
borrowing costs, coupled with tighter
rules in the rental market, have
created challenges. But the UK’s love
affair with property remains intact,
and many still see real estate as a
reliable source of capital growth.
For brokers and lenders, this
presents both a responsibility
and an opportunity. There is a
clear appetite among prospective
investors. However, many of these
individuals are entering the market
for the first time, and in far more
complex conditions than previous
generations faced.
It is vital that finance providers
focus on education and support.
Clarity around affordability, tax,
and regulation will help prospective
landlords make informed decisions.
Equally, lenders must continue to
offer more flexible, tailored products
that reflect the diverse needs of
borrowers. In doing so, the market
can maintain the momentum that has
built so far this year, and usher in the
next generation of investors. ●
June 2025 | The Intermediary
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