Landlords’ property hotspots revealed: Milton Keynes, Bristol and Manchester see surge in buy-to-let purchases as renters return to towns and cities
- Buy-to-let purchases in town and city centres were up 100% in 2021
- Milton Keynes saw a whopping 667% increase in buy-to-let mortgage purchases
- Bristol and Manchester saw 4 times the number of mortgage completions
- Analysis taken from Paragon Bank, one of the 10 biggest buy-to-let lenders
Buy-to-let investors returned to city and town centre postcodes with a vengeance last year, after avoiding them during the pandemic.
Analysis by Paragon Bank has revealed a strong increase in mortgage completions for buy-to-let purchases in city and town centre postcodes during 2021, up 100 per cent on 2020.
Appetite for urban living fell away during 2020 as lockdown-weary Britons sought bigger homes with more outside space.
Aside from London and Manchester, the top 10 growth locations for buy-to-let completions were in secondary towns and cities, according to Paragon Bank.
The number of available rental properties on Rightmove more than doubled in 2020 in some city centres, forcing many landlords to slash rents to combat falling demand.
This led some to sell their properties, or avoid buying any more.
But according to Paragon’s analysis, towns and city centres are back in demand – although with a greater focus towards smaller, secondary towns and cities.
Where exactly are investors buying?
The data is taken from Paragon’s own lending activity, but as one of the 10 biggest buy-to-let mortgage lenders in Britain it provides a credible picture of where landlords may be focusing their attention.
The highest increase in buy-to-let activity was recorded in Milton Keynes, which experienced a whopping 667 per cent increase in buy-to-let mortgage completions in 2021 compared to the previous year.
The highest percentage increase was recorded in Milton Keynes, which experienced a 667% rise in completions in 2021 compared to the previous year
This was followed by Bristol and Manchester, which both experienced four times the number of mortgage completions in 2021 than in 2020, and Luton which saw a 258 per cent rise.
However, not all towns and cities have been attracting investors in 2021, according to Paragon.
Buy-to-let mortgage completions in Birmingham actually fell by 42 per cent in 2021. The same went for Southampton, which saw activity down by 30 per cent year-on-year.
Manchester also saw four times the number of buy-to-let mortgage completions in 2021 than it did in 2020 according to Paragon Bank
In London, Paragon’s figures showed a 95 per cent increase in buy-to-let completions during 2021.
However, it is clear landlords have been concentrating their acquisitions away from central London and towards the outer suburbs.
Whilst Zone 1, which covers central London, saw a 38 per cent increase in mortgage completions, Zone 3 saw a 183 per cent increase.
|Location||2021 mortgage completion growth|
|Source: Paragon Bank|
Richard Rowntree, director at Paragon Bank said: ‘The strongest growth was not necessarily in the UK’s major cities.
‘Aside from London and Manchester, the top 10 growth locations were in secondary cities or large towns.
‘The likes of Milton Keynes, Luton, Bristol, Northampton and Nottingham experienced strong double or triple-digit growth in completions during the year.
‘There appears to be one of, or a combination of, three factors that each of these locations share.
‘They are in commutable distance to a major city, they mostly have vibrant universities and they have healthy local economies.
‘Landlords have been reacting to changing tenant demand and there is clearly demand for tenants to retain urban living, but perhaps targeting smaller towns and cities.’