Buy to let investment in England has notably shifted northwards over the past decade, with a clear decline in landlord purchases in London and the south following the introduction of the stamp duty surcharge on second homes. This change reflects a significant rebalancing of the buy to let market, with the Midlands and northern regions now leading in mortgaged property acquisitions.

Shift in Regional Buy to Let Investment

Data from Paragon Bank reveals that in 2015, just before the additional 3% stamp duty surcharge on second homes was implemented, nearly 56% of all mortgaged buy to let purchases were concentrated in southern regions of England. In contrast, the Midlands and northern regions accounted for just under 35% of these purchases.

By 2025, this trend had reversed. The Midlands and northern regions together represented just over half of all buy to let purchases, while the south’s share dropped to 38%. This marks a significant geographical redistribution of investment within the buy to let sector.

Defining Moment for the Buy to Let Market

Louisa Sedgwick, managing director of mortgages at Paragon, described the stamp duty surcharge as a “defining moment for the buy to let market.” She explained, “Ten years on, the data shows a clear and lasting rebalancing, with the Midlands and north now accounting for a greater share of landlord purchases than the south.”

Ms Sedgwick added that landlords have become more commercially focused, with regions such as the North West, Yorkshire, and the North evolving from alternative locations into core buy to let markets. Meanwhile, higher-priced southern regions have seen their relative importance decline.

Implications for Rental Markets in London and the South East

Ms Sedgwick also issued a warning regarding the long-term consequences of reduced investment in London and the South East. She noted, “The long-term decline in investment into London and the South East could be storing up problems for future renters and exacerbate the supply-demand imbalance issue that has affected these markets in recent years.”

With projected population growth expected to increase demand, Ms Sedgwick emphasised the need for greater levels of supply in these economically important and transient rental markets. Without adequate investment, tenants may face rising rental inflation and fewer housing choices.

Regional Changes in Buy to Let Market Shares

Paragon’s analysis highlights specific regional shifts in buy to let purchases over the decade. The North West increased its share from 9% to almost 14%, Yorkshire rose from 7% to just over 10%, and the North East climbed from 4% to 7%. The West Midlands also saw growth, rising from 8.19% to 10.6%, with the East Midlands edging up from 7.45% to 8.79%.

Conversely, southern regions experienced declines. Greater London’s share of purchases fell from 19.03% in 2015 to 12.28% in 2025. The South East saw a sharper drop from 24.09% to 15.91%, while the South West decreased from 8.66% to 6.44%.

What this means for landlords

For landlords, these trends suggest a growing opportunity in northern and Midlands markets, where buy to let investment is becoming more concentrated. The shift may reflect more affordable property prices and stronger rental yields in these regions compared to the south.

However, landlords with portfolios in London and the South East should be mindful of potential challenges ahead, including increased rental inflation and limited tenant choice due to reduced new investment. Strategic planning and market awareness will be essential to navigate these evolving regional dynamics.

Source: Based on reporting from Property118

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