Some 35% of buy-to-let purchases were completed in the South of England last year, bringing the proportion down to a record low.
According to an analysis of UK Finance data by buy-to-let lender Paragon, this was due to the stamp duty surcharge on additional properties which was introduced in 2016.
This was a fall from a 39% share of buy-to-let purchases in the South East, Greater London and the South West in 2022, and down from a high of 52% in 2015 – the year before the tax was brought in.
Since 2015, the share of buy-to-let purchases in South England has steadily fallen year-on-year. This was excluding 2021 and 2021 when the stamp duty holiday was in place.
Looking at each region independently, the share of buy-to-let mortgaged purchases in Greater London fell from 19% in 2015 to 12% in 2023. Purchases in the South East declined by 24% to 17% over the same period, while in the South West this reduced by 9% to 6%.
Most of the other recorded regions saw a growth in buy-to-let mortgaged purchases over that time period, such as the North West where there was a jump from 9% to 14% and Yorkshire and Humber where this rose from 6% to 10%.
East Anglia was the only region not in the South of England to see a decline in buy-to-let purchases from 2015 to 2023, but this was only a small drop from 4% to 3%. Paragon said this was due to the East of England having higher than average house prices.
Disproportionate impact on certain markets
Richard Rowntree (pictured), managing director of mortgages at Paragon, 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 private rental sector 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.”
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS
