First-time landlords are flocking to Northern England, capitalising on lower property prices, affordable rental coverage and impressive rental yields, according to Fleet Mortgages’ latest Rental Barometer for Q4 2024.
The report reveals that the North East leads the charge, with 25% of all mortgage applications from landlord borrowers coming from first-timers. Yorkshire & Humberside follows with 13%, significantly outpacing the South West, where just 4% of applications came from new landlords.
Northern regions boast the lowest average loan requirements and monthly rents in the country. The North East’s average monthly rent of £706 and average mortgage loan of £77,000 create a low-risk environment for aspiring landlords.
The region also offers the highest rental yield at 9.3%, followed closely by Yorkshire & Humberside (8.6%) and the North West (8.3%). In contrast, Southern regions struggle to compete, with Greater London yielding just 5.8% and the South East 6.4%.
DEMOGRAPHIC SHIFT
The trend toward new landlord activity signals a shift in the buy-to-let landscape. Nationwide, the share of applications from first-time landlords rose from 10% in Q3 2024 to 11% in Q4. However, seasoned landlords with portfolios of six to 14 properties still dominate the market, accounting for 34% of applications – a jump from 30% in the previous quarter.
Steve Cox, Chief Commercial Officer at Fleet Mortgages, sees this as a promising sign of market resilience.
“The narrative that the buy-to-let sector is surviving solely on remortgages is misleading. Our data shows a healthy appetite for property purchases, particularly in regions where affordability and yields align favorably,” he says.
REGIONAL DISPARITIES
The data also underscores regional differences in landlord strategies. In Yorkshire & Humberside, 91% of applications were from limited company landlords, compared to just 60% in the South West.
Also, purchase applications in Yorkshire & Humberside exceeded remortgages, a rare occurrence in today’s market, with 60% of applications aimed at buying new properties.
STAMP DUTY
Despite rising costs, including higher stamp duty surcharges and increased property management expenses, landlords remain undeterred. The persistent imbalance between tenant demand and property supply continues to drive the market, with rental stock in short supply pushing rents higher.
Cox emphasised the importance of landlord contributions to the housing market, urging policymakers to reconsider punitive measures against buy-to-let investors.
He adds: “The demand for rental properties is unrelenting, and we need more supply to stabilize rents and house more people. Landlords are essential players in addressing this gap.”
