North Down estate agency John Minnis Estate Agents says Britain's looming inheritance boom could create a new generation of accidental landlords, with hundreds of thousands of people already receiving inheritances worth £50,000 or more. It expects the overall value of intergenerational transfers to double over the next two decades.
New research from the Resolution Foundation shows 2.1 million adults received an inheritance over the two years of 2018-20, up from 1.7 million in 2008-10. Of those, 32% received £50,000 or more, which equates to roughly 670,000 people.
The value of inheritances is also climbing, with the data pointing to substantial growth in both the number and size of bequests, while other research estimates that total intergenerational transfers will double over the next 20 years as older generations pass wealth to younger ones.
John Minnis Estate Agents believes inheritance will not automatically translate into property investment, but the scale of wealth changing hands creates the conditions for a new type of landlord to emerge.
Becoming a landlord does not always start with someone deliberately building a buy-to-let portfolio, either. HMRC's latest landlord research found that 40% of landlords originally bought their property to live in or received it through inheritance or as a gift, compared with 60% who bought specifically as an investment.
How accidental landlords could enter the market
"We're entering a period where property wealth accumulated over decades is going to move between generations on a much greater scale," said John Minnis, founder of John Minnis Estate Agents.
"For someone who already owns their own home, receiving £50,000, £100,000 or more can create a completely different set of financial choices. They might reduce their mortgage, invest in stocks and shares, keep the money in savings or spend some of it. But purchasing a rental property could also enter the conversation."
Based on the scale of these transfers, Minnis predicts that inheritance-backed and accidental landlords could become a more prominent part of Britain's rental market over the next decade.
That does not mean 670,000 people will become landlords. Instead, the figure shows the size of the pool receiving substantial capital, while existing HMRC data shows inheritance and gifts already act as a route into property ownership and landlordism.
The firm also ran some scenarios. If only 1% of the roughly 670,000 people who received £50,000 or more in 2018-20 used that wealth to buy a rental property, that would represent around 6,700 potential investors. At 5%, the figure would rise to approximately 33,600, and at 10% to approximately 67,000.
The scenarios are illustrative rather than forecasts of actual landlord numbers, but even a small proportion of inheritance recipients choosing property investment could create a meaningful new cohort of landlords.
"The really interesting point is that we don't need a huge proportion of inheritance recipients to become landlords for this to have an impact on the rental market," he added. "If even a relatively small percentage of people receiving substantial inheritances decide to put some of that capital into rental property, you could see thousands of new investors entering the market over time."
The Resolution Foundation data shows the proportion of recipients receiving £50,000 or more climbing from 25% to 32% between 2008-10 and 2018-20. Separate research from John Minnis suggests tomorrow's landlord is increasingly likely to enter the market earlier in life, viewing property as part of a wider investment portfolio rather than simply a retirement asset.
These investors are more willing to look beyond their local area, targeting cities and regions with strong rental demand, regeneration opportunities and long-term growth prospects. Rather than buying a single buy-to-let property, many are building diversified portfolios across different locations and property types.
