The proportion of buy to let properties purchased in Southern England fell to a record low last year, continuing a trend seen since the Stamp Duty surcharge for additional properties was introduced in 2016.
Paragon Bank analysis of industry data revealed that 35% of properties purchased with a buy to let mortgage during 2023 were in the South East, Greater London and the South West.
This was down from 39% in 2022 and has fallen from a high of 52% in 2015, the year before the Stamp Duty surcharge was introduced. Since 2015, the proportion of stock purchased in Southern regions has fallen each year, aside from 2020 and 2021 when the Stamp Duty Holiday was introduced during the Covid pandemic.
Broken down further, the proportion of mortgaged buy-to-let homes purchased in London fell from 19% of the UK total in 2015 to 12% last year.
The South East declined from 24% to 17% over the same period, whilst the South West fell from 9% to 6% of the total.
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|
2015
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2023
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South East
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24%
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17%
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North West
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9%
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14%
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|
Greater London
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19%
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12%
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|
West Midlands
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8%
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10%
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|
Yorkshire & Humber
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6%
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10%
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East Midlands
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7%
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9%
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|
Scotland
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6%
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7%
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|
North East
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4%
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7%
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South West
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9%
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6%
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Wales
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3%
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4%
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East Anglia
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4%
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3%
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Conversely, the proportion of homes purchased in the North West increased from 9% in 2015 to 14% in 2023, with the Yorkshire & Humber growing from 6% to 10% of mortgaged buy to let purchases.
All other regions recorded an increase in the proportion of buy-to-let homes purchased between 2015 and 2023, apart from the East of England, another area of above-average house prices.
Paragon Bank Managing Director of Mortgages Richard Rowntree says: “The introduction of the Stamp Duty surcharge disproportionately impacted those markets with above average house prices in the south of England. For example, compared to 2015, the number of homes purchased with a buy-to-let mortgage was 70% lower last year, and a greater number of buy-to-let homes were purchased in the North West than in London during three of the past five years.
“Over the long-term, it’s clear that we will need more rental homes and a vibrant private rented sector across the UK. With the population forecast to increase by 9.9% - or by 6.6m people – by 2036, demand for rental property is only going to be stronger. That is particularly true of areas in the South of the country, particularly London where the transient population means that a strong supply of rental homes vital.”
He adds: “We are seeing the Private Rental Sector utilised by a broader range of people than ever before and those who want or need to rent a home should expect to be able to choose from a range of fairly priced, decent quality rental homes. Unless supply is boosted to meet forecast growth in demand, rents will only grow higher in markets with extreme supply/demand imbalances.”
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All down to stamp duty and nothing to do with Section 24 and the RRB? Well that’s alright then. 🤣🤣🤣🤣🤣
SDLT is bad news, but it pales in the face of all the other dead weight we are also carrying- RRB. Sec 24,
Licensing, crippling mortgage costs, open media and political hostility to name just the tip of the ice -berg.
Stamp Duty means virtually nothing stacks for anyone in the South. Certainly compared with other investments or just putting money in a high interest account.
Section 24 is hideous for established portfolio landlords. Not a problem for fully incorporated landlords, although the higher interest rates for limited company mortgages still mean it's hard to find anything that stacks.
Jo, my friend come off it I would agree Stamp Duty means nothing to you in the North / North East where you won’t be paying it as many are a low threshold or exempt.
It certainly means a great deal to investors in the south or London where a semi can easily cost you the guts of £700k if you can get it for that.
So that extra 3% adds another £20k to the purchase I love your idea of nothing. 👍
I think you misunderstand Jo - she is saying that because of SD the numbers don't stack up in the south!
I find this very hard to believe
When you’ve got such a helpful government acting in landlords best interests constantly , you horrible greedy nasty landlords should be ashamed of yourselves i know i am
They are talking proportions not overall numbers so more to do with diminishing returns (S24, rising prices to buy and maintain, licensing etc) which are worse in London and the south.
Hardly surprising if investors are looking northwards where return on investment is more likely to surpass just sticking the money in a high interest bank account.
BTL no longer makes sense anywhere in the U.K. regardless of the level of return. It’s just not worth the candle!
There is no future in Buy to Let unless you are a corporate. The PRS has been destroyed by the politicians appeasing the media and activists. There are better hassle free ways to invest your money.
There’s obviously a direct connection between the attack on landlords, including licensing schemes, 3% stamp duty surcharge, regulatory changes and the huge number of Sales falling through.
So anyone rubbing their hands with glee to see landlords being bullied and continually targeted, think on why you’re properly is not selling and dropping in price, you have excluded a large number of potential buyers.
increased SDLT, leading to lower BTL supply, causing higher rents for the tenants.
Further unintended consequences of government medalling.
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