Buy-to-let landlords in the Midlands continue to invest in the sector on the back of a ‘positive outlook’, but elsewhere in the country, landlords are generally scaling back, particularly in London, new figures show.
Fresh data from UK Finance reveals that buy-to-let mortgages for property purchase have dropped by around 40% overall since 2015 following the announcement of tax and regulatory changes for the sector.
But a recent survey of over 680 landlords carried out by BDRC on behalf of Paragon found that landlords in the Midlands seem to be bucking the trend, boosted by strong economic growth in the region, a thriving higher education sector and continued, successful regeneration of Britain’s second city, Birmingham.
Landlords are still picking up property in the East and West Midlands, despite a significant drop in purchase activity in central London and more modest reductions across the rest of the country, thanks to high rental returns in the region, with East Midlands landlords currently achieving a 6.7% average rental yield, while those in the West Midlands are achieving yields of 6.2%.
Some 42% of landlords in the East Midlands and 33% in the West Midlands said tenant demand was increasing, compared with just 24% of all landlords who indicated rising demand.
Landlords operating in central London were least likely to be buying property, with a net 16% saying they had sold some property in the last quarter.
John Heron, managing director of mortgages at Paragon, commented: “These findings highlight a big regional difference in landlord experience and buying habits.
“Some central London landlords appear to be scaling back a little while landlords in the Midlands continue to invest on the back of a positive outlook.”