First-time landlords are making their mark in the northern regions of England, capitalising on lower property prices, competitive rental yields, and manageable mortgage requirements. Fleet Mortgages’ latest quarterly Buy-to-Let Barometer for Q4 2024 reveals that the North East leads the charge, with 25% of all mortgage applications in the region coming from first-time landlords, followed by Yorkshire & Humberside at 13%.
New investors flock to affordable rental hotspots
The North East has become an attractive hub for new landlords, thanks to its affordability and impressive rental yields. With an average monthly rent of £706—the lowest in the country—and an average mortgage loan of just £77,000, the region offers an accessible entry point into the buy-to-let market.
Fleet Mortgages highlighted that Yorkshire & Humberside and the North West share similar characteristics, boasting lower property prices and enticing rental yields. The North East currently delivers an average yield of 9.3%, with Yorkshire & Humberside and the North West offering 8.6% and 8.3%, respectively. In contrast, southern regions, such as Greater London, lag behind with an average yield of 5.8%.
Steve Cox, Chief Commercial Officer at Fleet Mortgages, said: “It’s not surprising that where properties have lower values but strong yields, we are seeing more purchase business from those with significant portfolios or those who are just starting on their landlord journey.”
Limited company ownership gains traction
Another trend highlighted by Fleet’s Rental Barometer is the increasing use of limited company structures among landlords. In Yorkshire & Humberside, 91% of mortgage applications were from landlords operating through limited companies, compared to just 60% in the South West.
The data also shows a shift in purchase activity. While there has been a narrative that landlords are solely focused on remortgaging due to rising costs, Fleet’s findings tell a different story. Regions like the North East and East Anglia show an almost equal split between purchase and remortgage applications. Notably, in Yorkshire & Humberside, purchase applications accounted for 60%, surpassing remortgages at 40%.
“This indicates a willingness among landlords to expand their portfolios, even with higher costs and the increased stamp duty surcharge introduced last year,” added Cox.
Strong fundamentals sustain landlord interest
Despite rising costs and regulatory challenges, landlords are demonstrating resilience. Fleet Mortgages emphasised the ongoing strength of tenant demand, particularly in regions with limited supply. This demand is driving rental increases and encouraging landlords to invest further in the private rental sector (PRS).
“We certainly need more supply in the PRS to house people and to keep rents from rising exponentially,” Cox noted. “The Government would be much better off seeing landlords as a necessary part of the overall housing market, rather than introducing policies that seemingly aim to deter them.”
The report also underlines the importance of landlords in addressing the UK’s housing needs. Whether seasoned investors or first-timers, they continue to view the sector as a viable avenue for strong yields and capital growth.
