Landlords prioritise regional markets over UK-wide investment
Professional landlords were found to increasingly invest in markets they knew well, rather than spreading their portfolios across the UK, according to Redwood Bank.
The bank looked at landlord investment patterns in 2021-26 and found that professional investors were becoming increasingly concentrated within their home regions.
Redwood said the findings suggested that landlords were more discerning about “operational expertise, local market knowledge and long-term investment quality rather than simply pursuing the highest headline yields.”
The East Midlands saw an increase of 15.1% of investors buying in their local area, closely followed by the South West, which saw a 14.2% uplift over the past five years.
Wales, however, saw a 9.4% drop in local investment, with landlords seeking to extend portfolios in South West England instead.
Tom Worbey, senior product manager at Redwood Bank, said: “The buy-to-let market has changed significantly over the past five years. Professional landlords are operating in a much more complex environment, with higher borrowing costs, greater regulation and increasing expectations around property management.
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“In that environment, local knowledge has become a genuine competitive advantage. Experienced landlords understand the markets they operate in, they know what tenants are looking for, they have relationships with local agents and contractors and they’re often better placed to identify opportunities that others might miss.
“Professional landlords are thinking much more like business owners than they were a decade ago. They’re balancing income, long-term growth, operational efficiency and exit strategy together rather than making decisions based on yield alone. The regions they invest into are a key driver and output of this.”
