Inheritance boom could create more landlords

An inheritance boom could create a new generation of landlords as wealth passes between generations, according to one firm.

John Minnis estate agents say that for homeowners receiving a substantial sum, buying a property to let could become one of their options.

It points to Resolution Foundation research which shows that around 670,000 adults received inheritances worth at least £50,000 during 2018–20.

The agency’s founder, John Minnis, predicts that inherited wealth could help more people enter the lettings market over the next decade.

Inheritance opens investment choices

He said: “We’re entering a period where property wealth accumulated over decades is going to move between generations on a much greater scale.

“For someone who already owns their own home, receiving £50,000, £100,000 or more can create a completely different set of financial choices.”

Mr Minnis added: “They might reduce their mortgage, invest in stocks and shares, keep the money in savings or spend some of it.”

He says buying a property to rent out will be among a popular choice.

More substantial inheritances

The Resolution Foundation research found that 2.1 million adults received an inheritance during 2018–20, compared with 1.7 million during 2008–10.

The proportion receiving at least £50,000 increased from 25% to 32% between those periods.

That equates to 670,000 recipients of inheritances worth £50,000 or more during the later two-year period.

However, the agency acknowledges that receiving an inheritance does not automatically lead to property investment.

Future buy to let investors

Mr Minnis expects people using inherited wealth, alongside those who become landlords without initially planning to, to account for a bigger share of Britain’s lettings market.

Separate research by his agency suggests that future landlords are increasingly likely to enter the market earlier in life and regard property as part of a wider investment portfolio.

It also points to a willingness to buy beyond their local area, targeting places with strong tenant demand, regeneration opportunities and prospects for long-term growth.

The agency says many are looking to build portfolios across different locations and property types, rather than buying a single buy to let home.