New research from the Bank shows the North–South divide is reshaping the buy-to-let market.
The lender reports a marked shift over the past decade, with landlords increasingly favouring purchases in the North.
It attributes much of this change to the Stamp Duty surcharge introduced ten years ago.
In 2015 — the year before the surcharge took effect — the South accounted for almost 56% of all mortgaged buy-to-let purchases, compared with just under 35% in the Midlands and the North.
Fast-forward to 2025 and the trend has flipped: the Midlands and the North now account for more than half of all buy-to-let purchases, while the South has slipped to 38%.
UK Finance data shows the North West leading the shift, jumping from 8.92% of mortgaged landlord purchases in 2015 to 13.76% ten years on — a 4.84-point rise. Yorkshire and the Humber isn’t far behind, up 3.67 points over the same period.
The bank links the shift in landlord purchasing from the South to the North to the introduction of the Stamp Duty surcharge because property prices are typically higher in the South. The additional charge can be considerably more expensive there, making northern markets comparatively more attractive to investors.
The spokesperson for the lender, said: “The Stamp Duty surcharge was a defining moment for the buy-to-let market. Ten 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.”
And warned: “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.”
The Stamp Duty surcharge on second homes came into force on 1 April 2016, making it costlier for investors to buy extra properties.
What started as a 3% top-up in England jumped to 5% in October 2024.
Wales now charges the same 5%, and Scotland has pushed its equivalent rate to 8%.