The UK rental market is experiencing huge demand from all types of tenants, and a key goal for all buy-to-let landlords is to choose the right one.
When embarking on any buy-to-let property investment, it is important to consider tenant demand in relation to the property and location you are looking at. This can determine your rental income, the potential for void periods, and your overall experience as a landlord.
The largest proportion of renters continue to be below the age of 40, as many people still rent before getting onto the property ladder. However, in recent years, homeownership has been coming later in life, with more people establishing their careers while renting in their 20s or into their 30s before committing to buying their own home.
New research from Paragon Bank has also revealed that the number of older tenants – aged between 55 and 64 – has been on the rise over the past decade, giving buy-to-let landlords and investors food for thought when looking at rental properties.
The banking group’s report found that the number of renting households with a person in this age group had risen by 66% between 2014 and 2024, bringing the total number to 492,000. This was the biggest rise of any age group over the decade, but the second biggest jump was seen in the over-65 age group, with a rise of 33%.
Many buy-to-let landlords will purposely invest in properties that lend themselves to a particular tenant type, while others may own a property that is likely to appeal to a wider range of people. Which one you choose will depend on a range of factors, including your budget, your management style, and your property goals.
Young professionals
Tenants in their 20s to 30s, including new graduates just starting out in their careers, are one of the most common tenant types for buy-to-let landlords who invest in city centre or town centre properties, or homes that are within easy commuting distance to cities and towns or nearby job locations, such as science parks.
These tenants tend to want to be closer to the action, and often share with friends. This could be in smaller flats, such as two-bedroom apartments, or in larger houses, such as houses in multiple occupation (HMOs). HMOs can reap much higher yields for buy-to-let landlords as each tenant is on a separate tenancy agreement, and void periods are minimised due to this.
New-build properties can be particularly appealing to this tenant type, who want to live in a modern, fresh home with minimal maintenance and cheaper utility bills.
This tenant type may not stay in the property for as long as other renters, as they may be more quick to relocate due to job changes, friendship or relationship changes, or getting onto the housing ladder.
Students
Some buy-to-let landlords steer clear of students, but demand for student accommodation has been on the rise across much of the UK in recent years, and standards have also improved considerably.
Purpose-built student accommodation (PBSA) is an increasingly popular asset class among property investors due to the predictability of returns on offer, as students sign up for a set period (normally September to August), as demand is extremely stable in areas close to universities.
The higher tenant turnover may not appeal to some buy-to-let landlords who would prefer to have longer-term inhabitants. Most student accommodation is managed by an agency, meaning you can leave the letting process to the experts, which is suitable for investors looking for a more hands-off option.
The vast majority of student property is provided furnished, which is another consideration. There may also be a greater level of wear and tear to the property and the furnishings and appliances provided.
Families
Properties with multiple bedrooms and outside space will often be most likely to attract families. They may be more likely to want an unfurnished home – and there may also be a higher chance of them staying put for longer.
Things like parking could also be a priority, as well as energy bills, so offering an energy efficient home is likely to be a key selling point for buy-to-let landlords looking at this tenant type.
In terms of location, there are a wide range of places families will choose to live, from central spots to more rural areas.
Historically, some buy-to-let landlords have refused to rent to families with children – but when the Renters Rights Bill comes to pass, this is expected to be outlawed, meaning no landlords will be able to discriminate against tenants with children.
Older tenants
In recent years, there has been a growing number of older, longer-term renters in the market, whose circumstances vary from living alone or with friends, to living with a partner or family.
Getting onto the property ladder may not be a priority for long-term, older tenants, meaning they may be looking for a rental home where they get additional amenities and extras, and will pay more for this.
This could mean build-to-rent homes and brand-new apartment blocks in attractive locations are more appealing to these renters. Equally, they may also seek to live away from the hustle and bustle, but still with amenities and good transport and road links. Like families, parking and outdoor space is more likely to be a priority.
Buy-to-let landlords seeking investment property
If you’re an existing buy-to-let landlord, or a first-time investor looking to secure the best opportunity, BuyAssociation can help. Our experienced property investment consultants can talk you through all the options, and let you know about our existing and upcoming investment opportunities.
We focus on some of the UK’s top-performing locations, meaning strong rental yields and capital appreciation prospects. Many of our developments are in up-and-coming areas, too, maximising an investment’s potential over the long-term.
Get in touch today to find out more, or browse some of our current projects for buy-to-let landlords and homebuyers here.
