Landlords in the Midlands buck the trend by still purchasing property
Landlords are still buying property in the East and West Midlands despite a significant drop in purchase activity in Central London and modest reductions across the rest of the country, according to Paragon.
The buy-to-let lender said that more than four out of 10 landlords in the East Midlands (42%) and a third of landlords in the West Midlands (33%) said tenant demand was increasing, compared with just under a quarter of all landlords (24%) who indicated rising demand.
Rental yields for landlords operating in the Midlands were also strong, with landlords in the East Midlands reporting average yields of 6.7% and those in the West Midlands achieving yields of 6.2%.
Bucking the trend
Buy-to-let mortgages for property purchase have fallen by around 40% overall since 2015, according to UK Finance, but landlords in the Midlands seem to be bucking the trend.
Paragon noted that the region has been boosted by strong economic growth, a thriving higher education sector and continued, successful regeneration of Britain’s second city, Birmingham.
Relocation of head office and operational functions outside of London to Birmingham by some of the UK’s biggest financial services firms, including HSBC and Deutsche Bank, together with heightened activity ahead of the Birmingham 2022 Commonwealth Games, have provided an added boost.
John Heron, managing director of mortgages at Paragon, said: “These findings highlight a big regional difference in landlord experience and buying habits. Some Central London landlords appear to be scaling back a little while landlords in the Midlands continue to invest on the back of a positive outlook.”