Buy-to-let investment is gradually grinding to a halt in some markets where higher purchase and mortgage costs are taking their toll on landlords.  

New buy-to-let investment has dropped to levels not seen since 2007, with investors buying 10% of homes sold across Great Britain in the first four months of 2025, down from 11% in 2024, reports lettings agency Hamptons.

Buy-to-let purchases have fallen in every region of Great Britain since 2015, just before the stamp duty surcharge was introduced, except in the North East which remains the capital of buy-to-let.

Landlords purchased 28% of homes sold so far this year in the region, up from 23% in 2015, while it’s also the highest yielding region, where the typical new buy-to-let achieved a 9% gross yield, outperforming the 7% national average.

A record 39% of buy-to-lets purchased since January were in the North or the Midlands, up from 24% in 2007 and 34% in 2022 when interest rates started rising. Meanwhile, just 43% of purchases were in London, the East of England, South East or South West, down from 53% in 2015.

Decline

Wales and London have seen the most significant decline. Investors made up 6% of all buyers in Wales so far this year, down from 16% in 2015, while they bought 8% of homes sold in the capital, a figure that has more than halved since 2015.

Aneisha Beveridge (main image), head of research at Hamptons, believes investors will still find opportunities in the South of England, particularly if rents continue to rise and house prices pick up pace.

“Lower interest rates will also help, not only by lowering mortgage costs, but by reducing rates available on savings accounts, which might make buy-to-let look more appealing,” she adds.

In April, the average rent on a renewal in Great Britain reached £1,257 pcm - £44 pcm or 3.7% more than the same month last year. Meanwhile, the rent on a home where a new tenant moved in increased £17 pcm or 1.2% year-on-year.