Generational shift as millennials make up half of new buy-to-let investors in England and Wales | Buying to let

Millennials now make up half of new buy-to-let investors in England and Wales, signaling a generational shift in homeownership as rents fall, according to a report.

This is a surprising finding, as many millennials (people born between 1981 and 1996) struggle to afford housing; This means they are less likely to own a home than older generations. Despite this, some have clearly outperformed, with millennials leading the way in buy-to-let investment, according to an analysis of Companies House data by estate agent Hamptons.

For the first time, millennials have made up 50% of all new shareholders in buyout companies formed so far this year. Five years ago, they made up 40% of buy-to-let shareholders.

So far this year, three-quarters of new companies’ shareholders have been under 50; this rate was 68% compared to ten years ago. While tax increases and stricter regulations have caused some homeowners to increase their sales, an influx of young investors has also helped sustain homeownership purchases.

The share of homes bought by an owner in England and Wales remained unchanged compared to the same period last year, despite an increase in the second home stamp duty surcharge. As of April, homeowners now pay a 5% surcharge, down from the previous 3%.

Nationwide, homeowners accounted for 11.3% of property purchases in the third quarter; This rate showed a small increase compared to 11.2% in the previous year.

The Hamptons estimates that millennial homeowners will form 33,395 new rent-to-buy companies this year; This is more than double the number installed in 2020.

These acquisitions are increasingly concentrated outside the south of England, previously a property centre. London, the south-east, south-west and east of England, accounted for 34% of investor purchases across England and Wales in the July-September quarter. In 2016, these regions accounted for 50% of purchases.

Investors are increasingly looking to buy in the north of England, where yields are higher and cheaper properties have lower stamp duty costs. More than a quarter (28.4%) of homes sold in the north-east were owner-occupied, compared to 8% in London.

The average rent for a newly rented house in Britain fell by 0.3% from September, the Hamptons said, with £4 a month falling from £1,402 to £1,398. This marks a significant change from the 4.2% annual growth recorded a year ago.

London led the slowdown, with monthly rents falling by 2.7%, or £65. Rents in inner London fell by 4.6% to an average of £2,766 per month; this was £165 below the peak in October 2024.

In contrast, rents on renewed contracts have continued to rise, outpacing inflation and rising by 4.6% in the last 12 months.

Buy-to-hire businesses have become the largest business type in the UK this year; almost four times the number of fast food takeaways or hairdressers.

This shift reflects the fact that baby boomers, now in their 60s and 70s, are less likely to build new portfolios. Instead, they are more likely to terminate them or pass them on to future generations. For the first time this year, the number of companies led by Generation Z, whose ages range from 13 to 28, outnumbered baby boomer start-ups.