Landlords focusing on secondary towns and cities – like Milton Keynes

Buy-to-let landlords are increasingly targeting smaller secondary towns and cities, analysis from Paragon Bank has revealed.

Activity has surged in Milton Keynes, where property completions have increased by 667% in 2021 compared to the year before.

This was followed by Bristol with a 300% increase, Manchester (300%) and Luton (258%).

Other urban locations in the top 10 included Plymouth (183%), Stoke (157%), Northampton (133%), Cardiff (70%) and Nottingham (64%).

Across the UK as a whole landlord completions rose by 100% in 2021, as 2020 saw the housing market all but shut down for a few months due to the pandemic.

Richard Rowntree, director of mortgages at Paragon Bank, said: “Landlord demand for city and town centre property was strong in 2021, with Paragon’s analysis showing completions for house purchase increasing by 100% compared to the previous year.

“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.”

Rowntree added: “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.”

In London, Paragon’s figures show a 95% increase in buy-to-let completions in the capital during 2021, with landlords concentrating acquisitions in Zones 2 and 3 as they balanced the requirement for yield, availability of property and tenant demand.

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