Redwood Bank has found that the share of professional landlords buying in their home region rose by 15.1 percent in the East Midlands between 2021 and 2026, as investors put local operating knowledge ahead of chasing the highest headline yields.
The lender’s review, published on 14 September, also recorded a 14.2 percent increase in local investment in the South West. Wales moved the other way: the proportion investing locally fell 9.4 percent as landlords expanded into the neighbouring South West.
The shift comes as portfolio decisions have become harder to reverse. Higher borrowing costs, area-specific licensing and planning rules, and more demanding property management all make a distant purchase more than a spreadsheet decision. An investor who is close to their agents, contractors and council requirements may be better placed to protect income when a tenancy, repair or compliance issue needs quick action.
East Midlands leads the move towards local buy-to-let
Redwood’s analysis does not say that the East Midlands has the UK’s highest yields. It measures a change in where professional landlords are choosing to buy. The 15.1 percent rise was the largest identified in the review, with the South West second at 14.2 percent.
That distinction matters. Yield comparisons can help investors narrow a search, but they do not capture the cost of managing an unfamiliar council area, arranging works at distance or understanding local tenant demand. In a market where margins are less forgiving, operational control can be a reason to accept a lower headline return.
Tom Worbey, senior product manager at Redwood Bank, said local knowledge had become a competitive advantage as experienced landlords understand tenant demand, maintain relationships with agents and contractors, and can identify opportunities others miss.
Local knowledge, licensing and rental yields
Redwood links the trend to a more business-like approach among professional landlords. Its review says investors are balancing income, long-term growth, operational efficiency and exit strategy together rather than treating yield as the sole test.
The lender’s analysis also has a clear HMO angle. Licensing and planning requirements vary sharply between authorities, so a landlord moving into shared housing in a new area needs more than an attractive rental appraisal. Landlord Knowledge recently reported that Stoke-on-Trent was consulting on tighter HMO controls and wider licensing, illustrating how quickly a local rule change can alter the assumptions behind a purchase.
This follows Landlord Knowledge’s report on Stoke student properties delivering a 9.42 percent average yield. That figure shows why high-yield markets attract attention, but Redwood’s findings point to a more cautious counterweight: the best projected return is not automatically the best fit for a landlord’s management capacity.
What Redwood’s figures do and do not show
Redwood has not published property-level transaction data or a region-by-region table behind the review. The figures should therefore be read as the lender’s analysis of investment patterns, not as a ranking of where every landlord should buy. The bank’s full regional investment analysis says the private rented sector is professionalising as more investors operate through limited-company special purpose vehicles and hold mixed portfolios.
There is also a practical financing point. Lenders assessing a portfolio investor may look beyond the individual property at experience, wider strategy and why the proposed area suits the borrower. A landlord moving outside a familiar patch should be ready to show how management, rental demand and any licensing obligations will be handled.
What this means for landlords
- If you’re comparing areas: test the management plan alongside the gross yield – local contractors, agent coverage, licensing and travel time can change the true return.
- Watch for: HMO and selective-licensing consultations in any new authority before committing to a purchase.
- If you’re refinancing or seeking finance: document why the property and location fit the existing portfolio, rather than relying only on a rental appraisal.
- Bottom line: higher yield can still be attractive, but it should not outweigh a landlord’s ability to manage the property well.
Editor’s view
Landlords have long chased the best yield on a map. Redwood’s figures suggest that the calculation is changing: compliance and management costs can turn distance into a real financial risk. A familiar market is not automatically safer, but investors should put a price on local knowledge before stretching a portfolio.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 15 September 2026
Sources: Redwood Bank regional investment analysis
Related reading: Paragon: Stoke student properties deliver 9.42% average yield
