Figures from Paragon Bank show that while the South accounted for nearly 56% of all mortgaged BTL house purchases in 2015, this had completely reversed by 2025, with the Midlands and North representing just over half of BTL purchase volumes – while the South’s share had fallen to below 40% (38%).
London decreased from 18% of purchases to 12%, with the South East declining from 23% to 16% and the South West dropping from 9% to 6%.
Louisa Sedgwick, Paragon Bank’s managing director of mortgages, called the introduction of the surcharge “a defining moment”.
She added: “10 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.
“Landlords have become more commercially focused, and regions such as the North West and Yorkshire and the North have moved from being alternative locations to core buy-to-let markets, while higher-priced Southern regions have seen their relative importance decline.”
Conversations you need to have with landlords before the Renters’ Rights Act
Sponsored by BM Solutions
The North West of England has shown the biggest growth in BTL, up nearly 5% in the decade, while the South has seen the biggest decline, down over eight percentage points.
Mind the rental gap
The Paragon Bank figures follow analysis from Hamptons lettings that suggested the BTL surcharge has led to 2.2 million fewer privately renting households in the UK.
Fewer first-time buyers now compete with a landlord when buying, with Aneisha Beveridge, Hamptons’ head of research, saying the policy had “broadly delivered what the government of the day set out to achieve”.
Sedgwick noted that 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.”
“If projected population growth is anywhere near accurate, we will need greater levels of supply for these transient and economically important rental markets. Without it, tenants could face rising rental inflation and reduced levels of choice,” she added.
