New buy-to-let purchases are being increasingly concentrated in the North of England, as investors target higher-yielding homes with lower entry costs.\u00a0 A record 39% of buy-to-lets purchased during the first four months of 2025 were in the North of England or the Midlands, up from 24% in 2007 and 34% in 2022 when interest rates started rising (chart 1).\u00a0<\/p>\n
Conversely, investors are shifting away from the South of England, where properties are typically more expensive and generate lower rental yields.\u00a0 Here, the new 5% stamp duty surcharge (SDLT) and higher mortgage rates have hit particularly hard.\u00a0 Just 43% of buy-to-let purchases this year were located in London, the East of England, South East or South West, down from 53% in 2015, just before stricter tax and regulatory changes started coming into play.\u00a0 The remaining 17% of purchases were in Wales and Scotland.<\/p>\n
The average investor buying in the Midlands and North of England paid \u00a3150,480 for a new buy-to-let this year, \u00a3141,760 or 49% less than a landlord who bought in the South of England for an average of \u00a3292,240.\u00a0 This lower property price would save an investor \u00a311,190 on stamp duty costs.<\/p>\n
This comes as new buy-to-let investment fell this year to a level not seen since 2007.\u00a0 Buy-to-let investors purchased 10% of homes sold across Great Britain in the first four months of 2025, down from 11% in 2024 and a high of 16% in 2015.<\/p>\n
Buy-to-let purchases have decreased in every region of Great Britain over the last decade, apart from in the North East.\u00a0 The North East remains the capital of buy-to-let, where landlords purchased 28% of homes sold so far this year, up from 23% in 2015.\u00a0 It\u2019s also the highest yielding region in the country, where the typical new buy-to-let achieved a 9.3% gross yield, outperforming the national average of 7.1%.<\/p>\n
Wales and London have seen the most significant decline in buy-to-let purchases.\u00a0 The share of homes bought by a landlord in Wales has fallen by nearly two-thirds over the last decade.\u00a0 Investors made up 6% of all buyers in Wales so far this year, down from 16% in 2015.<\/p>\n
Meanwhile, London, the most expensive region in the country with the lowest rental yields, has also seen a significant fall.\u00a0 Investors purchased 8% of homes sold in the capital so far this year, the same proportion as last year, but a figure that has more than halved since 2015 when investors made up 16% of all buyers in the capital.\u00a0 For every new rental home purchased in London, there are now 3.1 buy-to-lets bought in the North West.<\/p>\n
Share of homes bought by a landlord in each region<\/strong><\/p>\n Source: Hamptons & Land Registry<\/p>\n \u00a0Scotland, where tighter rental regulations and rent caps have been introduced in recent years, has the lowest levels of investment.\u00a0 Here, investors purchased 5% of homes sold this year, half the 10% levels seen a decade ago.<\/p>\n Despite less investment in general, landlords remain active in Northern markets.\u00a0 Nine of the 10 buy-to-let hotspots since the stamp duty surcharge was increased in November 2024 from 3% to 5% are in the Midlands and the North of England.\u00a0 Redcar and Cleveland tops the list, where investors purchased 50% of homes sold.\u00a0 Here, the typical landlord spent \u00a370,300 on their new buy-to-let, paying a \u00a33,515 stamp duty bill.<\/p>\n Eight of the 10 local authorities on the hotspot list offered gross rental yields above the England & Wales average (7.1%), with many nearing double-digits (table 2).\u00a0 These higher yields give investors more headroom to cover higher costs and taxes.<\/p>\n Top 10 buy-to-let hotspots (last six months)<\/strong><\/p>\n Source: Hamptons<\/p>\n With stamp duty bills becoming a significant barrier to entry in London, an increasing number of investors are buying properties outside the capital.\u00a0 Nearly two-thirds (65%) of London-based investors bought a buy-to-let outside the capital this year, up from 41% a decade ago and just 24% in 2007.\u00a0<\/p>\n The crossover point when London investors were more likely to buy outside the capital came in 2018, just after the 3% SDLT surcharge on second homes was introduced in 2016 and when tax relief on mortgage interest for higher-rate taxpayers began to be phased out.<\/p>\n Lower entry costs encouraged 18% of London-based investors to purchase a buy-to-let in one of the three Northern regions this year, more than triple the share (5%) who did so a decade ago.<\/p>\n Although yields have been increasing nationwide over recent years, investors are focusing on higher-yielding areas to ensure profitability after accounting for higher mortgage costs, maintenance expenses and taxes.\u00a0 This year, a record 23% of buy-to-let purchases achieved a double-digit yield, up from 17% in 2024 and 9% in 2016.\u00a0 This partly reflects the shift towards Northern areas, where yields tend to be higher.<\/p>\n On the typical buy-to-let purchase costing \u00a3198,550, each 1% rise in the gross yield brings in an extra \u00a31,985 a year in rental income.\u00a0 If a landlord invested \u00a3198,550 in the North East, they would earn an average of \u00a318,400 in rental income each year, \u00a37,010 or 62% more than if they invested in London.\u00a0 However, over the long run, property prices in the capital have generally increased more.<\/p>\n","protected":false},"excerpt":{"rendered":"New buy-to-let purchases are being increasingly concentrated in the North of England, as investors target higher-yielding homes with…\n","protected":false},"author":2,"featured_media":93977,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5008],"tags":[748,393,4884,44219,40169,16,15],"class_list":{"0":"post-93976","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-england","8":"tag-britain","9":"tag-england","10":"tag-great-britain","11":"tag-investment-property","12":"tag-regional-insights","13":"tag-uk","14":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114491955814232196","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/93976","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=93976"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/93976\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/93977"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=93976"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=93976"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=93976"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n <\/td>\n 2025<\/strong> (Jan-Apr)<\/strong><\/td>\n YoY Change<\/strong><\/td>\n Change since 2015<\/strong><\/td>\n Gross Yield<\/strong><\/td>\n<\/tr>\n \n North East<\/strong><\/td>\n 28%<\/td>\n 1%<\/td>\n 5%<\/td>\n 9.3%<\/td>\n<\/tr>\n \n East Midlands<\/strong><\/td>\n 15%<\/td>\n 0%<\/td>\n -3%<\/td>\n 7.2%<\/td>\n<\/tr>\n \n West Midlands<\/strong><\/td>\n 14%<\/td>\n -2%<\/td>\n -7%<\/td>\n 7.8%<\/td>\n<\/tr>\n \n Yorkshire & The Humber<\/strong><\/td>\n 12%<\/td>\n -2%<\/td>\n -4%<\/td>\n 7.9%<\/td>\n<\/tr>\n \n North West<\/strong><\/td>\n 12%<\/td>\n -1%<\/td>\n -5%<\/td>\n 8.2%<\/td>\n<\/tr>\n \n South East<\/strong><\/td>\n 9%<\/td>\n 0%<\/td>\n -6%<\/td>\n 6.5%<\/td>\n<\/tr>\n \n London<\/strong><\/td>\n 8%<\/td>\n 0%<\/td>\n -8%<\/td>\n 5.7%<\/td>\n<\/tr>\n \n South West<\/strong><\/td>\n 8%<\/td>\n -2%<\/td>\n -6%<\/td>\n 6.4%<\/td>\n<\/tr>\n \n East of England<\/strong><\/td>\n 8%<\/td>\n 1%<\/td>\n -7%<\/td>\n 6.7%<\/td>\n<\/tr>\n \n Wales<\/strong><\/td>\n 6%<\/td>\n -2%<\/td>\n -10%<\/td>\n 8.7%<\/td>\n<\/tr>\n \n Scotland<\/strong><\/td>\n 5%<\/td>\n -1%<\/td>\n -5%<\/td>\n \u2013<\/td>\n<\/tr>\n \n <\/td>\n Local Authority<\/strong><\/td>\n Region<\/strong><\/td>\n % of homes bought by a landlord (last 6 months)<\/strong><\/td>\n Average gross yield<\/strong><\/td>\n<\/tr>\n \n 1.<\/strong><\/td>\n Redcar & Cleveland<\/strong><\/td>\n North East<\/td>\n 50%<\/td>\n 9.8%<\/td>\n<\/tr>\n \n 2.<\/strong><\/td>\n Darlington<\/strong><\/td>\n North East<\/td>\n 40%<\/td>\n 9.6%<\/td>\n<\/tr>\n \n 3.<\/strong><\/td>\n Derby<\/strong><\/td>\n East Midlands<\/td>\n 39%<\/td>\n 6.7%<\/td>\n<\/tr>\n \n 4.<\/strong><\/td>\n Gateshead<\/strong><\/td>\n North East<\/td>\n 38%<\/td>\n 9.4%<\/td>\n<\/tr>\n \n 5.<\/strong><\/td>\n Newcastle upon Tyne<\/strong><\/td>\n North East<\/td>\n 38%<\/td>\n 8.2%<\/td>\n<\/tr>\n \n 6.<\/strong><\/td>\n Middlesbrough<\/strong><\/td>\n North East<\/td>\n 35%<\/td>\n 9.0%<\/td>\n<\/tr>\n \n 7.<\/strong><\/td>\n County Durham<\/strong><\/td>\n North East<\/td>\n 32%<\/td>\n 10.2%<\/td>\n<\/tr>\n \n 8.<\/strong><\/td>\n East Staffordshire<\/strong><\/td>\n West Midlands<\/td>\n 31%<\/td>\n 7.1%<\/td>\n<\/tr>\n \n 9.<\/strong><\/td>\n Epping Forest<\/strong><\/td>\n East of England<\/td>\n 31%<\/td>\n 5.8%<\/td>\n<\/tr>\n \n 10.<\/strong><\/td>\n Leeds<\/strong><\/td>\n Yorks. & The Humber<\/td>\n 26%<\/td>\n 8.1%<\/td>\n<\/tr>\n