The buy-to-let (BTL) market is entering yet another interesting new chapter.
Recent data shows that for the first time, millennials (people born between 1981 and 1996) now account for half of all new BTL investors in England and Wales. This marks a clear generational shift in a market long dominated by older investors, and it shows that the profile of landlords is changing fast.
But the trend does not stop with generational demographics. Alongside this domestic transition, international interest in UK property continues to evolve. In particular, investors from developing economies and the emerging global middle class are increasingly viewing the UK as a stable and strategic destination for their capital, with bricks and mortar a perennially popular asset class to consider.
In this blog, we’ll explore how the BTL landscape is changing, where future demand is emerging, and why lenders with the right products and specialist expertise are best positioned to support brokers and today's diverse profile of borrowers.
A younger, more commercially minded domestic generation
Part of the answer lies in the changing profile of UK landlords themselves.
The rise of millennial investors reflects a broader shift in how property is being approached as an asset class. This generation is taking a larger share of new BTL purchases and entering the market with a far more structured, commercially focused mindset than might previously have been the case.
Supporting this, incorporation rates among landlords have risen sharply in recent years. This shows that domestic investors are opting for limited company structures as a tax response, but also as part of longer-term portfolio planning. Rather than entering the market opportunistically or by accident, many are doing so with a clearly defined strategy from the outset.
This shift is also geographical. While London remains important, its capital growth has suffered in recent years, while rental yields have struggled to keep up with the rest of the country due to the well-above-average house prices. As such, we're seeing many more landlords looking to places like the Midlands, North East and North West for investment opportunities.
What this suggests is that a significant portion of the next generation of BTL borrowers will come from within the UK itself. They are younger, more structured in their approach, and more deliberate in how they build portfolios, allowing them to adapt to regulatory and tax challenges rather than stepping away from the market.
However, the rise of the use of limited companies presents greater complexity when financing their strategies.
A different base of international investors
Alongside the domestic shift, we are seeing growing appetite for UK property from overseas investors. But, while international demand has long been part of the BTL sector, the profile of that investor is evolving in much the same way as it is at home.
Historically, attention has often focused on ultra-high-net-worth individuals purchasing prime London assets. Today, however, the picture is broader. As emerging economies expand, so too do their middle classes. Professionals, entrepreneurs and business owners across parts of Africa, the Middle East and Asia are increasingly looking more globally, seeking stable jurisdictions in which to preserve and grow their wealth.
It's a pattern that can be tracked over the years, with demand coming from all manners of places, from South Africa (driven by political and currency concerns) to Hong Kong (as uncertainty increased), and more recently Turkey, where high inflation has pushed investors to seek stability elsewhere.
And that's what the UK can provide. It offers a transparent legal system, established property rights, a mature rental market and a long track record of resilience in property values. Even through periods of economic turbulence – from Brexit to the pandemic and rising interest rates – the underlying strength of the market has endured.
This matters because it widens the pool of future borrowers beyond the usual assumptions about overseas demand, and the fact that the new generation of international BTL investors may not be HNWIs is important to recognise for lenders and brokers alike.
How RAW Capital Partners can serve the next generation
Put these two trends together and you get a borrower landscape that is more diverse and complex than the mainstream lending model was typically designed for.
Domestically, newer investors may be building through limited companies from day one. Internationally, borrowers may have strong balance sheets but overseas income streams and limited UK credit footprints.
What’s more, there are borrowers who sit outside simple categories. For instance, we have worked with clients living and working in the UK on Tier 2 visas who can appear “international” from an underwriting perspective, even though they are UK resident in practical terms.
Others may have foreign currency income, mixed-use properties, holiday lets, or portfolio structures that don’t fit neatly into a standardised lending matrix. In each of these cases, the fundamentals can be strong, but they require flexibility rather than rigid criteria.
At RAW Capital Partners, we have built our proposition around exactly this kind of nuance. We assess every case on its merits, considering the borrower, the structure and the asset in the round rather than relying on a tick-box approach.
As the next generation of BTL borrowers continues to emerge, our experience in non-UK resident lending, combined with our new UK resident proposition, will allow us to recognise their unique needs – and finance them.
As the market changes, we’re ready to support it.