"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"
- Louisa Sedgwick - Paragon Bank
Ten years after the Stamp Duty surcharge was introduced in April 2016, Paragon Bank analysis reveals a lasting regional shift in buy-to-let borrowing, with northern England now accounting for a larger share of landlord house purchases than London and the South.
The research shows how the additional 3% tax on second homes accelerated a move away from higher-priced southern regions towards areas offering more sustainable investment fundamentals.
How the market has changed since 2015
In 2015, the year before the surcharge, the South represented nearly 56% of all mortgaged buy-to-let house purchases.
By contrast, the Midlands and North together accounted for just under 35%. By 2025, the balance had reversed: the Midlands and North now represent slightly over half of buy-to-let purchase volumes, while the South’s share has fallen below 40% (38%).
Northern and Midlands regions drive growth
Within this broader trend, specific northern regions have seen sustained growth:
- North West: Now the second largest regional buy-to-let market, its share rose to almost 14% in 2025 from 9% a decade earlier.
- Yorkshire: Increased from 7% to 10% of buy-to-let transactions.
- North East: Rose from 4% to 7%.
These shifts highlight the rising importance of northern locations for landlords seeking higher rental yields and more commercially sustainable investments.
Southern markets lose share
By contrast, buy-to-let purchases in Greater London, the South East, and the South West fell sharply after the surcharge and have not returned to pre-2016 levels:
- London: Declined from 18% of purchases to 12%.
- South East: Dropped from 23% to 16%.
- South West: Fell from 9% to 6%.
Louisa Sedgwick, managing director of mortgages at Paragon Bank (pictured), 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.”
She added, “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.”
Implications for landlords and investors
The data indicates that buy-to-let borrowing is now more commercially driven, with landlords prioritising regions where rental yields are stronger and property prices more sustainable. For investors, this shift suggests that northern and Midlands markets now offer more attractive long-term returns compared with traditionally dominant southern locations.
Looking ahead, supply-demand pressures in London and the South East could influence rental inflation, underscoring the importance of regional strategy for landlords and property investors in the UK.
