My parents are giving me £50,000 to get on the housing ladder – so I’m investing

Video game developer Matthew Small plans to get on the housing ladder within the next year but, like more and more young people, his ambition is not to become a homeowner – but a landlord instead.

Matthew’s parents are gifting him £50,000 cash to use as a deposit, but the 29-year-old has decided to continue living with them and invest the money in a buy-to-let. He hopes it will mark the beginning of big property investment ambitions.

‘I know a lot of people are keen to get their own space away from their parents, but I love spending time with mine,’ says Matthew, who lives in Wembley, north-west London.

Matthew lived at home while studying, then went to work in Newcastle for three years where he lived alone.

‘I got a bit homesick,’ he says. ‘I like being around my family, and being away from them was a bit hard.’

His job allows him to work remotely, so he was able to move back in with his parents. While he does not pay rent, he contributes to the food bills.

Future-investing: Matthew Small (pictured) is hoping to build a buy-to-let portfolio while living at home with his parents

‘They do like having me around,’ he adds. ‘I don’t get in their way. My mum is already retired from her job as a school administrator, and my dad – an engineer – is coming close.

‘I get to spend time with them almost every day and there haven’t been any issues.’

Purchasing a buy-to-let, says Matthew, will give him a secondary source of income and means he can still live with his parents. ‘That’s more of a priority for me,’ he adds.

His siblings both used the money their parents gave them to buy their first homes, but Matthew plans to build up a portfolio to generate multiple income streams, so he is in no rush to move out.

‘There’s no urgency for me. I don’t have a partner or kids,’ he says. ‘I want to focus on being better off financially and, later on down the line, maybe I’ll look for my own property.’

The number of first-time buyer landlords is on the rise, say estate agents and mortgage lenders.

Buckinghamshire Building Society recorded a 20 per cent increase in first-time landlord applications, which includes first-time buyers, since last year.

Claire Askham, head of mortgage sales at Buckinghamshire BS, says: ‘We’ve seen a noticeable rise in enquiries from first-time buyers… often while living with family. 

It reflects a wider trend of people looking to build multiple income streams early on, through property investments, second jobs or side businesses.’

Having extra income generated by an investment property, or even a portfolio of them, can help support a future application for their own mortgage.

First-time buyers face high house prices and interest rates, so getting on the property ladder where they want to live can be a stretch too far.

Buy-to-let allows them to get on the ladder by purchasing in a cheaper area – and even to make money that they can use towards a deposit for their future home.

Wirral-based estate agency owner Liam Gretton has seen a growing trend of first-time buyers in their late 20s and early 30s choosing the landlord route.

‘For many, it is simply because they can’t yet afford the kind of home they would like to live in at this moment in time, especially if they live in a more expensive area,’ he says. ‘Instead of waiting years to save more of a deposit, they’re choosing to invest now, using buy-to-let as their vehicle.’

Many buyers live in London or are expats living abroad. ‘Currently we have several buyers in Cyprus. 

‘And last week we had a property on the Wirral that received three formal offers within six hours of marketing, two of which came from first-time buyers living in London and Lincoln,’ Liam adds.

Typically these buyers are looking for flats or terraced houses in areas such as Merseyside, Manchester and Preston, says Liam. Here, money goes further and rental demand is strong.

Homes close to shops, transport links and schools typically catch the attention of first-time buyer landlords because they are in high demand. 

Their investment goals vary, Liam says. ‘It depends on the individual. Some want a monthly income, others are thinking about long-term value and potential capital growth.

‘Others just want their money safely in bricks and mortar, rather than sitting in a bank account doing nothing.’

Foundation Home Loans, another specialist buy-to-let lender, has seen the proportion of first-time landlord applications increase from 21 per cent in 2024 to 24 per cent in the first four months of this year.

Getting a mortgage as a first-time buyer landlord is not plain sailing, however. While it is quite common among buy-to-let lenders to offer a mortgage to first-time landlords who own homes, fewer will lend to first-time…