The next wave of UK landlords may arrive not through a mortgage broker’s office but through a solicitor’s letter. Estate agency John Minnis argues that inheritance-funded buy-to-let could become a more prominent route into the private rented sector over the next decade, as property wealth built up over decades passes down the generations.
For investors, the argument matters because it points to a potential new source of buyers for rental stock. It also sketches a different kind of landlord: often already a homeowner, holding fresh capital and not necessarily a landlord by design.
The numbers behind the inheritance wave
Resolution Foundation analysis, set out in its intergenerational audit for the UK, shows 2.1 million adults received an inheritance over the two-year period 2018-20. That compares with 1.7 million in 2008-10.
Bequests are getting bigger, too. The share of recipients receiving £50,000 or more climbed from 25 per cent to 32 per cent over the same period, which the agency calculates equates to roughly 670,000 people inheriting at least that sum across 2018-20.
Separate estimates suggest the total value of wealth passing between generations will double over the next 20 years, as assets held by older households move to younger ones.
Accidental landlords are already a fixture
The notion that many landlords are made by circumstance rather than strategy is backed by official data. HMRC’s landlords research found that 40 per cent of landlords originally bought their property to live in or received it through inheritance or as a gift, against 60 per cent who bought specifically as an investment.
John Minnis, the agency’s founder, expects the coming transfer of wealth to widen that route. “We’re entering a period where property wealth accumulated over decades is going to move between generations on a much greater scale,” he says.
“For someone who already owns their own home, receiving £50,000, £100,000 or more can create a completely different set of financial choices,” he adds. “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.”
The firm is careful not to overstate the case. Inheritance, it accepts, will not automatically turn into property investment, but the sheer scale of the transfer creates the conditions for a new type of landlord to emerge.
How inheritance-funded buy-to-let could scale
To illustrate the potential, the agency has run some simple scenarios, which it stresses are not forecasts. If one per cent of the roughly 670,000 people who inherited £50,000 or more in 2018-20 used that money to buy a rental property, that would mean around 6,700 potential investors.
At five per cent, the figure rises to approximately 33,600. At 10 per cent, it reaches approximately 67,000.
“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,” Minnis says. “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 agency’s own research into what it calls “tomorrow’s landlord” suggests this cohort could behave differently from its predecessors. It expects them to enter the market earlier in life and to treat property as one part of a wider investment portfolio, rather than simply a retirement asset.
They are also described as more willing to buy beyond their local area, targeting cities and regions with strong rental demand, regeneration opportunities and long-term growth prospects. Rather than stopping at a single buy-to-let, many are taking a strategic approach to building diversified portfolios across locations and property types.
What this means for investors
The scenarios are deliberately loose: 670,000 recipients will not become 670,000 landlords. But the direction of travel is worth watching for anyone tracking how many rental homes are leaving the sector or weighing the UK rental market forecast for 2026.
For established portfolio owners, a steady flow of buyers with inherited capital could underpin demand for rental properties when they come to sell. For agents, lenders and managing agents, homeowners with spare capital and no landlord experience are a customer base worth reaching early, not least because preparing a property to let as a first-time landlord is rarely as simple as it looks.
The bigger question is whether returns and regulation make rental property the natural home for that money. Inheritors have plenty of alternatives, from clearing the mortgage to stocks and shares, and the sector will have to compete for every pound.
