A decade on from the Stamp Duty surcharge, buy-to-let borrowing shifts decisively north

25 March 2026

A decade on from the introduction of the Stamp Duty surcharge in April 2016, Paragon Bank analysis has revealed buy-to-let borrowing patterns have undergone a fundamental regional shift, with northern England now accounting for a larger share of landlord house purchases than London and the South.

Paragon Bank analysis of buy-to-let financed house purchase volumes over the past ten years shows how the additional 3% tax on second homes marked a turning point for the market, accelerating a move away from higher priced southern regions towards areas offering more sustainable investment fundamentals.

In 2015, the year before the surcharge was introduced, the South accounted for nearly 56% of all mortgaged buy-to-let house purchases, compared with just under 35% across the Midlands and North. By 2025, that position had reversed, with the Midlands and North representing just over half of buy-to-let purchase volumes, while the South’s share has fallen to below 40% (38%).

Northern and Midlands regions drive growth

Within this broader shift, the North West has emerged as the second largest single regional buy-to-let purchase market, increasing its share steadily over the decade and accounting for almost 14% of purchase volumes by 2025, compared to 9% a decade earlier.

Yorkshire has also seen sustained proportional growth, up to 10% of transactions from 7%, and the North East has increased from 4% to 7%.

Southern markets lose share a decade on

By contrast, buy-to-let purchase volumes in Greater London, the South East and the South West fell sharply as a proportion of total transactions following the introduction of the surcharge and have not returned to pre-2016 levels.

London decreased from 18% of purchases to 12%, with the South East declining from 23% to 16%. The South West dropped from 9% to 6%.

Louisa Sedgwick, Managing Director of Mortgages at Paragon Bank, said:

“The Stamp Duty surcharge was a defining moment for the buy-to-let market. Ten years on, the data shows a clear and lasting rebalancing, with the Midlands and North now accounting for a greater share of landlord purchases than the South.

“Landlords have become more commercially focused, and regions such as the North West and Yorkshire and the North have moved from being alternative locations to core buy-to-let markets, while higher-priced southern regions have seen their relative importance decline.”

She warned: “The long-term decline in investment into London and the South East could be storing up problems for future renters and exacerbate the supply demand imbalance issue that has affected these markets in recent years. If projected population growth is anywhere near accurate, we will need greater levels of supply for these transient and economically important rental markets. Without it, tenants could face rising rental inflation and reduced levels of choice.”