Paragon Bank has recently highlighted a trend among aspiring landlords, driven primarily by long-term tenant demand and the desire to supplement retirement income. The findings come from Paragon's latest study, The Next Generation Landlord Report, which surveyed 500 landlords who currently own up to three properties and have plans to expand their portfolios.

The report reveals that a significant portion of landlords are motivated by the ongoing demand for rental properties. Specifically, 60% of respondents cited this demand as a key factor in their decision to increase their property holdings.

In addition, more than half of the landlords surveyed (54%) are considering adding more properties to their portfolios as a way to enhance their retirement income. This suggests that many landlords view property investment as a long-term financial strategy.

Nearly half of the landlords (47%) pointed to long-term house price growth as an important factor in their investment decisions. Furthermore, 34% indicated that they prefer property as an investment asset over other options.

Louisa Sedgwick, Paragon Bank’s managing director of mortgages, stated: “The rental market is set for continued growth, driven by projected population increases of around 10% over the next decade.

“This favourable market outlook is underpinning the investment decisions of aspiring landlords.

“The research also demonstrates a clear focus on long-term planning, with over half of landlords building portfolios to support their retirement.

“This indicates a strong commitment to the rental sector and is essential for the overall health of the private rented market.”

The report also explored the factors influencing landlords' entry into the rental market. A significant 43% of respondents cited the influence of friends and family as a primary motivation.

Additionally, 39% of landlords reported that they began renting out their first property by accident, often following the purchase of a second home or through inheritance.

When asked why they chose property over other investments, 67% of landlords highlighted the tangible nature of real estate. Additionally, 54% valued its potential for wealth-building, and 53% appreciated the ability to pass it on as an inheritance.

Sedgwick concluded: “The rental market is attracting a growing number of landlords who are inspired by their friends and family or who have discovered the benefits of property ownership through other circumstances.

“These aspiring landlords are committed to providing rental homes for the future and require a supportive regulatory and fiscal environment to continue their investment activities.”