The buy-to-let sector has become less attractive to investors over the years, with many landlords ditching their properties for better yields from the stock market instead.
Buy-to-let investment is lower today than in 2007 as just 10% of properties sold so far in 2025 were bought to let, according to property firm Hamptons.
This proportion is down a staggering six percentage points from 2015, when the share of homes bought to let peaked at 16%. The proportion is also down one percentage point from 2024 (11%).
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
It comes as average house prices have increased by 3.2% annually in April, according to Halifax's house price index.
Declining interest in buy-to-let can be seen in almost all regions of the UK as buy-to-let purchases have been falling since 2015, when stamp duty was introduced. The only region to buck this trend is the north east where landlords bought 28% of homes sold so far in 2025 (up from 23% in 2015).
Wales has borne the brunt of decline, as buy-to-let investors make up just 6% of all purchases, down from 16% in 2015. The story is the same in London where investors bought 8% of homes sold so far this year, also down from 16% a decade ago. This is despite house prices having fallen in the capital
“Buy-to-let investment is gradually grinding to a halt in some markets where higher purchase and mortgage costs take their toll,” says Aneisha Beveridge, head of research at Hamptons.
However, Beveridge suggests that while new landlord purchases remain well below long-term averages, some investors have been looking further afield for new opportunities, as landlords are buying rental properties in the north and midlands at a record level.
The number of buy-to-let properties purchased in the regions has soared to 39% in the first four months of 2025, this is up from 34% in 2022. Hamptons notes that there are now 3.1 buy-to-let properties bought in the north west for every one bought in London.
It marks a long-term pivot by property investors – the number of buy-to-let houses bought in the north and midlands was just 24% in 2007.
If the north’s popularity does not wane, Hamptons estimates that 2033 will mark the point at which the bulk of buy-to-let purchases are in the midlands and north, rather than the South.
The reason for this shift appears to be due to higher rental yields outside the south, as well as overall lower entry costs. Furthermore, investors have recently been given a further reason to ditch the south because of rising stamp duty, according to Beveridge.
“One of the main ways landlords are trying to mitigate against higher stamp duty and mortgage costs is by seeking better-yielding and cheaper properties, increasingly in Northern England,” she says.
Beveridge also notes that while the move to the north may be a boon for property investors keen to obtain high rental yields while paying less for the home, the shift could cost the Treasury £161 million as cheaper properties will be liable for less stamp duty.
“This may also have a knock-on impact on rents if supply conditions in the South of England worsen, and where tenants' finances are already most stretched,” she added.
Where are landlords buying properties?
The region with the highest proportion of homes bought by a landlord so far in 2025 was the north east, where 28% of homes were bought to let.
Both the east and west midlands trail over ten percentage points behind at second and third place. In these regions, the proportion of homes bought to let in 2025 was 15% and 14% respectively.
Region | Share of homes bought by a landlord in 2025 | YoY Change | Change since 2015 | Gross Yield |
|---|---|---|---|---|
North East | 28% | 1% | 5% | 9.30% |
East Midlands | 15% | 0% | -3% | 7.20% |
West Midlands | 14% | -2% | -7% | 7.80% |
Yorkshire & The Humber | 12% | -2% | -4% | 7.90% |
North West | 12% | -1% | -5% | 8.20% |
South East | 9% | 0% | -6% | 6.50% |
London | 8% | 0% | -8% | 5.70% |
South West | 8% | -2% | -6% | 6.40% |
East of England | 8% | 1% | -7% | 6.70% |
Wales | 6% | -2% | -10% | 8.70% |
Scotland | 5% | -1% | -5% | - |
Source: Hamptons & Land Registry
The specific buy-to-let hotspots in the UK reflect this movement towards the north as nine out of the top ten hotspots are in the north and midlands.
Redcar & Cleveland leads the pack as 50% of homes bought in the region in the last six months were purchased by a landlord. It is no wonder too, as the average gross rental yield for properties in the area was 9.8%.
The area’s north eastern neighbours dominated the rest of the list as six out of ten of the UK’s buy-to-let hotspots were in the region.
The only southern local authority on the list is Epping Forest, which is at number 9. A list of the top ten buy-to-let hotspots in the UK so far in 2025 can be found below.
# | Local Authority | Region | % of homes bought by a landlord (last 6 months) | Average gross yield |
|---|---|---|---|---|
1 | Redcar & Cleveland | North East | 50% | 9.80% |
2 | Darlington | North East | 40% | 9.60% |
3 | Derby | East Midlands | 39% | 6.70% |
4 | Gateshead | North East | 38% | 9.40% |
5 | Newcastle upon Tyne | North East | 38% | 8.20% |
6 | Middlesbrough | North East | 35% | 9.00% |
7 | County Durham | North East | 32% | 10.20% |
8 | East Staffordshire | West Midlands | 31% | 7.10% |
9 | Epping Forest | East of England | 31% | 5.80% |
10 | Leeds | Yorks. & The Humber | 26% | 8.10% |
Source: Hamptons
-
Which UK region has the most in savings? Average savings by areaThe amount people have in their savings differs from region to region in the UK. How does your nest egg compare to those living nearby?
-
Doug and Mary Perkins: Specsavers’ clear-sighted foundersHelped by the deregulation of the sector in the 1980s and brilliant advertising, Mary Perkins and her husband Doug have taken Specsavers to the top of the optometry market
