Northern England Emerges as Buy-to-Let Hotspot for UK and Overseas Investors

A growing number of UK and overseas property investors are turning to Northern England and the Midlands as buy-to-let investment hubs, thanks to lower entry costs and significantly higher rental yields.

According to data from Hamptons and the Land Registry, 39% of all buy-to-let (BTL) purchases in the first four months of 2025 were made in these regions—a substantial jump from just 24% in 2007 and 34% in 2022 when interest rates began to rise. This regional shift represents a broader trend in investor behaviour, especially as landlords move away from more expensive southern markets impacted by rising taxes and mortgage costs.

Shift Away from the South

Buy-to-let activity has decreased significantly in southern regions such as London, the South East, and South West. In 2015, these areas accounted for 53% of BTL purchases. By 2025, that share had dropped to 43%.

A new 5% stamp duty surcharge has made high-value properties even less attractive, further pushing landlords to seek better value in northern postcodes. The average buy-to-let purchase in the North and Midlands was £150,480, compared to £292,240 in the South—a 49% price difference. This translates into a £11,190 saving on stamp duty alone.

Gross Yields and Investment Returns

The shift north isn’t just about affordability—it's also about performance. The North East currently offers the highest gross yields in the UK at 9.3%, well above the national average of 7.1%.

Share of Homes Bought by a Landlord (2025 Jan–Apr)

A Decade of Change

Wales and London have seen the steepest declines in BTL market share. In Wales, landlords accounted for just 6% of buyers in 2025, down from 16% in 2015. In London, the share has halved from 16% to 8% over the same period.

Investors are now 3.1 times more likely to buy in the North West than in London, with the North East maintaining its title as the UK’s BTL capital.

Top 10 Buy-to-Let Hotspots (Last 6 Months)

What This Means for Overseas Investors

With rising stamp duty and tighter regulations in London, 65% of London-based investors are now buying outside the capital. That’s a sharp increase from 41% in 2015 and just 24% in 2007.

In 2025, 18% of these investors bought in Northern regions, up from just 5% a decade ago. With double-digit yields on the rise (23% of BTLs now achieve this), the shift north is likely to continue.

For overseas investors, especially from the Middle East and Asia, the North of England offers:

• Lower entry points
• Stronger rental yields
• Less exposure to tax burdens found in London

A £198,550 investment in the North East would generate an estimated £18,400 in annual rental income, 62% more than the same investment in London.

As yields rise and market dynamics evolve, Northern England continues to present a compelling opportunity for international property investors looking to build long-term income and capital growth.

Source: Hamptons & Land Registry