Landlords increasingly invest within home regions, Redwood Bank finds
The East Midlands recorded the largest change, with a 15.1% increase in investors buying within their local area over the five-year period.
Professional landlords are increasingly investing within their home regions rather than spreading their portfolios across the UK, according to analysis from Redwood Bank.
The bank’s review of landlord investment patterns between 2021 and 2026 found investors had become more concentrated in markets they already knew, with Redwood attributing the shift to greater emphasis on local knowledge and operational expertise.
The East Midlands recorded the largest change, with a 15.1% increase in investors buying within their local area over the five-year period.
This was followed by the South West, where local investment increased by 14.2%.
Welsh landlords bucked the wider trend, recording a 9.4% decline in local investment as investors increasingly expanded their portfolios into the neighbouring South West.
Tom Worbey, senior product manager at Redwood Bank, said: “The buy-to-let market has changed significantly over the past five years.
“Professional landlords are operating in a much more complex environment, with higher borrowing costs, greater regulation and increasing expectations around property management.
“In that environment, local knowledge has become a genuine competitive advantage.
“Experienced landlords understand the markets they operate in, they know what tenants are looking for, they have relationships with local agents and contractors and they’re often better placed to identify opportunities that others might miss.”
Redwood said landlords were increasingly concentrating investment in locations where they had established knowledge of planning and licensing requirements, tenant demand, rental values and property management networks.
The bank said this was particularly relevant for house in multiple occupation (HMO) investors due to differences in licensing requirements between local authorities.
Worbey added: “Professional landlords are thinking much more like business owners than they were a decade ago.
“They’re balancing income, long-term growth, operational efficiency and exit strategy together rather than making decisions based on yield alone.
“The regions they invest into are a key driver and output of this.
“Importantly, this has implications for lenders. Assessing a landlord today isn’t simply about looking at an individual property and a blanket portfolio check.
“It’s about understanding the borrower’s wider strategy, their experience and why a particular investment makes sense for their business.
“As landlord portfolios become more sophisticated, and more targeted, lending decisions need to reflect that.”
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