According to Paragon, the central region and northern England accounted for almost half of all new purchases by landlords in the first half of the year.
The lender’s analysis of industry data found that the East and West Midlands, Northwest, Northeast and Yorkshire and Humber accounted for 47.4% of mortgages, accounting for new purchases, up from 46% in the same period last year, compared with 33.5% a decade ago.
The share of London and Southeast has dropped from 41.6% in 2015 to 27.6% this year.
Landlords are increasingly concentrated in the central and northern markets, where real estate prices are lower, resulting in higher yields and lower acquisition costs, Paragon said.
This trend accelerated after the launch of stamp duty surcharges for those who purchase other homes in April 2016.
In the first half of the year, the Southeast (excluding London) attracted the largest share of landlord purchases at 15.4%, followed by the Northwest at 12.9%.
“The trend of investment in the Midlands and the northern markets is increasing after the introduction of stamp duty surcharges about a decade ago.
“These markets attract landlords for a variety of reasons, including proper stocks, strong tenant demand, a healthy local economy, lower purchase costs and higher returns overall.”
She added: “Southeast and London remain the most important rental markets in the UK, but considering the ephemerality of these markets and their economic importance.
“The new supply that has stifled increased demand for tenants has promoted rental inflation.
“There is no increase in new stocks across the Southeast, especially in London, and tenant options will be reduced.”
