First-Time Buyer Drop-Off Signals Long-Term Rental Growth for UK Property Investors

A new report from the HomeOwners Alliance paints a challenging picture for aspiring UK homeowners in 2025, but for property investors, the trend reveals a silver lining: rising demand for rental properties and long-term stability in the buy-to-let sector.

Over the past decade, concerns around the UK property market have intensified, particularly around the leasehold system, stamp duty, and the increasingly slow and outdated home buying process. These structural issues, combined with rising prices and affordability barriers, are pushing more people toward renting.

Key Trends Fueling Rental Demand

• The percentage of UK adults who view the leasehold system as a serious problem has jumped to 64%, up 22 points since 2015.
• Stamp duty is now seen as a significant barrier by 64%, up from 51% in 2015.
• The home buying and selling process is now a concern for 60% of respondents, also rising significantly over the past 10 years.

However, the most telling shift lies in the aspirations of future buyers.

The Decline of the First-Time Buyer Dream

Just 64% of non-homeowners now aspire to own, the lowest level in over a decade. This figure is even more striking when compared to 71% in 2024 and higher levels in the years prior.

The reasons? Rising house prices, steep deposit requirements, stamp duty burdens, and mortgage qualification hurdles have made homeownership feel increasingly out of reach.

For example:

• 88% of aspiring first-time buyers cite house prices as a serious concern.
• 87% worry about the availability of suitable homes.
• 77% struggle with mortgage access.

What This Means for Investors

While these challenges are a clear concern for buyers, they offer positive signals for landlords and property investors:

• Sustained rental demand: With fewer people able to buy, more will remain in or return to the rental market.
• Rising rents: A larger tenant pool and restricted housing supply create the conditions for higher rents.
• Stability and growth: Especially in cities and university towns, rental yields are expected to remain strong.

Regions like Wales, Scotland, and the South of England are reporting higher-than-average concerns from first-time buyers, suggesting these areas may see even greater rental market pressures.

Long-Term Outlook

For investors, the message is clear: while the road to homeownership may be narrowing for many, the path to reliable rental income is growing stronger. In a market defined by limited supply, rising costs, and increased renter reliance, UK property remains a resilient and attractive long-term asset class.

Source: HomeOwners Alliance, 2025