North East of England is buy-to-let hotspot, says property firm

The North East of England was the hotspot for buy-to-let investors in the third quarter of this year, according to a report.

Investor activity is increasingly concentrated in northern England, where yields are higher and stamp duty costs are lower, property firm Hamptons said.

It estimated that 28.4% of homes sold in the North East were bought by a landlord in the third quarter of 2025, compared with 8.0% in London, 7.1% in Scotland and 6.9% in Wales.

Across Britain, the average rent for a newly-let home fell by 0.3% over the year to September – down £4 per month from £1,402 to £1,398, Hamptons said.

It said the fall marks a “notable shift” from annual growth of 4.2% recorded a year earlier.

London drove the slowdown, with rents falling by 2.7% annually or £65 per month.

By contrast, average rents across Britain for renewed contracts increased by 4.6% over the previous 12 months.

The average renewal rent was £1,307 per month, surpassing the £1,300 per month mark for the first time, Hamptons said.

Aneisha Beveridge, head of research at Hamptons, said: “Landlord purchases haven’t collapsed in the face of higher taxes and tighter regulation – but they have shifted.

“New landlords have increasingly become an endangered species in markets across southern England, where big stamp duty bills and flatlining prices have nudged investors northwards.

“But in places like the North East, landlord activity remains close to all-time highs, showing that the buy-to-let market is adapting rather than retreating.”

The Hamptons lettings index uses data from the Connells Group to track changes to the cost of renting.

The index is based on achieved rather than advertised rents.

Here are the percentages of home sales where properties were bought by a landlord in the third quarter of 2025, according to Hamptons:

London, 8.0%

South East, 10.5%

South West, 8.1%

East of England, 8.2%

East Midlands, 15.4%

West Midlands, 13.1%

North East, 28.4%

North West, 13.3%

Yorkshire and the Humber, 11.2%

Scotland, 7.1%.

Wales, 6.9%

And here are average monthly rents on new lets in September, followed by the annual percentage increase or decrease, according to Hamptons:

London, £2,332, minus 2.7%

East of England, £1,227, 1.2%

South East, £1,476, 0.6%

South West, £1,294, 1.4%

East Midlands, £1,015, 1.3%

West Midlands, £1,095, 1.4%

North East, £928, 2.1%

North West, £1,052, 0.9%

Yorkshire and the Humber, £954, 0.4%

Wales, £864, minus 0.4%

Scotland, £1,076, 2.2%