Buy-to-let lending in the Midlands and north of England accounted for almost half of new purchases during H1 2025 as regional investment gathered pace.
Paragon Bank analysis of industry data showed that the East and West Midlands, North West, North East and Yorkshire and Humber accounted for 47.4% of new buy-to-let purchases with a mortgage in the first six months of the year by volume, up from 46% during the same period last year and 33.5% a decade ago.
Landlords have increasingly focused on markets in the Midlands and north, where property prices are lower, resulting in higher yields and reduced acquisition costs. The move accelerated following the introduction of the Stamp Duty surcharge in April 2016.
The North West is now the second largest market for buy-to-let mortgaged purchases, accounting for 12.9% of acquisitions during the first half of the year. Proportionally, Yorkshire and the Humber hit its highest level at 9.5%, up from 9.2% last year.
The North West now sits just behind the South East, which contributed 15.4% of purchases. The region overtook London, which accounted for 12% of purchases during the first half, in 2019.
The proportion of purchases in London and the South East has fallen from a peak of 41.6% in H1 2015 to 27.6% this year, broadly in line with last year, whilst the South West also declined to 6% from 6.2% last year.
The proportion of buy-to-let mortgaged purchases in Wales and Scotland have remained broadly flat over the past 10 years. Wales accounted for 3.5% of purchases, compared to 3.2% in 2015, with Scotland accounting for 6.8%, up from 6% a decade ago.
Louisa Sedgwick, Paragon Bank Managing Director of Mortgages, says: “The trend towards investment across Midlands and northern markets increased following the introduction of the Stamp Duty surcharge nearly a decade ago.
“These markets are appealing to landlords for several reasons, including the availability of appropriate stock, strong tenant demand, healthy local economies, lower purchase costs and generally stronger yields.”
She adds: “The South East and London are still the UK’s most important rental markets, however, given the transient nature of these markets and their economic importance. Stifled new supply against heightened tenant demand has driven rental inflation. Without an increase in new stock across the South East, and in particular London, tenant choice is diminished.”
This article is taken from Landlord Today