An agent claims that 25 to 34 year olds are opting to invest in property over purchasing their own residential homes.
John Minnis says that an increasing number of young people are investing their earnings, working capital and inheritance in property more than ever before due to an ‘increased awareness of wealth-building’ and ‘wealth management.’
He says that due to high deposit requirements and mortgage rates, many young people now view property investment as a much more viable financial strategy than homeownership.
Minnis’ agency cites a report from Paragon Bank indicates a decrease in the average age of buy-to-let landlords, driven by growth in the proportion of landlords in their 30s. In 2023, 31% of new buy-to-let mortgages were acquired by those in their 30s, compared to 21% in 2014. Landlords aged 18-29 also saw an increase in their share of purchases.
Research from September 2024 showed over 3,000 buy-to-let landlords were under 21, and a further 63,000 were aged 21-30, suggesting a growing interest in property investment among the very young. Millennials (31-40) also constitute an increasingly large percentage of investment property owners.
Another notable trend amongst young people in the real estate market is a recent increase in those investing in a second property for renting or wealth building purposes.
While traditionally this age group has been associated with first-time home purchases, the decision to purchase an additional property is now gaining popularity.
Younger and first-time property investors take advantage of regions with affordability challenges where there are either lower property prices or strong rental demand to secure long-term financial stability.
Research conducted by John Minnis as part of its property investment guide shows that Scotland, Northern Ireland, The Midlands and South-East London are amongst the most popular places to invest due to high rental demand and attract young buyers seeking strong returns.
In many cases, this shift is being driven by strategic financial planning, long-term wealth accumulation and an evolving mindset about the value of property ownership, says company director and founder John Minnis at John Minnis estate agents.
He adds: “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. Purchasing a second property allows them to leverage real estate as a long-term asset.
“With the growing demand for rental properties, especially in urban areas, many young investors see the potential to generate passive income by renting out their second property. The rental market has become more lucrative in recent years, providing a steady cash flow and helping to offset mortgage costs.”
Minnis believes that this trend is only expected to continue.
“In today’s economic climate, many young people are turning to property investment as a strategic means to build wealth and secure financial stability. They recognise that investing in real estate not only offers potential appreciation over time but also provides a source of passive income through rentals.
“This approach allows them to enter the property market earlier, leveraging their investments to eventually acquire their own homes with greater financial confidence.”
The combination of low-interest rates, increased access to financial resources, and the growing desire for long-term wealth has converged at a time when the housing market offers promising returns for investors. Additionally, many young adults are facing challenges entering the traditional housing market due to soaring home prices, prompting them to pivot to investment properties as a more feasible alternative.
As more young adults in the 25-34 age range look to build wealth, diversify their assets, and secure financial freedom, the investment in second properties is emerging as a key strategy.
And he concludes by saying that with the right market conditions, access to information, and financing options, this trend is expected to continue as the next generation of investors takes a more proactive approach to real estate.
