First the good news - investors are still purchasing buy to let properties; the less good news is that it’s a very patchy regional picture with London in particular losing out.
Figures from UK Finance, analysed by Paragon Mortgages, show that buy to let mortgages for property purchase have fallen by around 40 per cent overall since 2015 following the announcement of tax and regulatory changes for the sector.
Landlords in the Midlands however seem to be bucking the trend, boosted by strong economic growth in the region, a thriving higher education sector and continued regeneration in Birmingham.
Relocation of head office and operational functions outside of London to Birmingham by some of the UK’s biggest financial services firms, including HSBC and Deutsche Bank, together with heightened activity ahead of the Birmingham 2022 Commonwealth Games, have provided an added boost.
More than four out of 10 landlords in the East Midlands and one third of landlords in the West Midlands say tenant demand is increasing, compared with just under a quarter of all landlords across the whole UK who indicate rising demand.
Rental yields for landlords operating in the Midlands are also strong, with landlords in the East Midlands reporting average yields of 6.7 per cent and those in the West Midlands achieving yields of 6.2 per cent.
However, investors in Central London are the least likely to be buying property, with a net 16 per cent saying they had sold some property in the last quarter.