• 35% of BTL homes purchased in 2023 were in the South, a record low
• Proportion of BTL homes purchased in the South has fallen from 52% in 2015
• Southern regions disproportionately impacted by Stamp Duty surcharge

The proportion of buy-to-let properties purchased in Southern England fell to a record low last year, continuing a trend seen since the Stamp Duty surcharge for additional properties was introduced in 2016.

Paragon Bank analysis of industry data revealed that just over a third (35%) of properties purchased with a buy-to-let mortgage during 2023 were in the South East, Greater London and the South West.

This was down from 39% in 2022 and has fallen from a high of 52% in 2015, the year before the Stamp Duty surcharge was introduced. Since 2015, the proportion of stock purchased in Southern regions has fallen each year, aside from 2020 and 2021 when the Stamp Duty Holiday was introduced during the Covid pandemic.

Broken down further, the proportion of mortgaged buy-to-let homes purchased in London fell from 19% of the UK total in 2015 to 12% last year. The South East declined from 24% to 17% over the same period, whilst the South West fell from 9% to 6% of the total.

Conversely, the proportion of homes purchased in the North West increased from 9% in 2015 to 14% in 2023, with the Yorkshire & Humber growing from 6% to 10% of mortgaged buy-to-let purchases.

All other regions recorded an increase in the proportion of buy-to-let homes purchased between 2015 and 2023, apart from the East of England, another area of above-average house prices.

Paragon Bank Managing Director of Mortgages Richard Rowntree said: “The introduction of the Stamp Duty surcharge disproportionately impacted those markets with above average house prices in the south of England. For example, compared to 2015, the number of homes purchased with a buy-to-let mortgage was 70% lower last year, and a greater number of buy-to-let homes were purchased in the North West than in London during three of the past five years.

“Over the long-term, it’s clear that we will need more rental homes and a vibrant private rented sector across the UK. With the population forecast to increase by 9.9% - or by 6.6 million people – by 2036, demand for rental property is only going to be stronger. That is particularly true of areas in the South of the country, particularly London where the transient population means that a strong supply of rental homes vital.”

He added: “We are seeing the PRS utilised by a broader range of people than ever before and those who want or need to rent a home should expect to be able to choose from a range of fairly priced, decent quality rental homes. Unless supply is boosted to meet forecast growth in demand, rents will only grow higher in markets with extreme supply/demand imbalances.”

For media enquiries contact:

Michael Clarke
Head of Media Relations
Paragon Bank
07740090746

Notes to editors:

Paragon Bank analysed regional UK Finance BTL house purchase data.

Paragon lends to private individuals and limited companies and provides mortgages suitable for single, self-contained properties, as well as HMOs and multi-unit blocks. Paragon can accommodate higher aggregate lending limits and more complex letting arrangements including local authority leases and corporate leases along with standard ASTs.

Paragon Bank PLC a subsidiary of the Paragon Banking Group PLC which is a FTSE 250 company based in Solihull in the West Midlands. Established in 1985, Paragon Banking Group PLC has over £14 billion of assets under management, helping more than 340,000 customers to achieve their ambitions.