Affordable Regional Markets Strengthen Their Buy-to-Let Investment Case

Rightmove’s second-quarter data supports the same regional trend. Advertised rents increased by 4.1% year on year in both the North East and North West.

The North West recorded an average of 14 tenant enquiries per available rental property, compared with eight in London. This indicates a much stronger demand relative to available supply in one of the UK’s more affordable regions.

Paragon Bank’s first-quarter lending data recorded average gross yields of 8.74% in Wales, 8.10% in the North East and 7.87% in the North West, compared with 5.74% in Greater London.

Gross yield is not net return, but it shows the income generated before finance and operating costs are deducted. A higher gross yield provides greater capacity to cover mortgage payments, maintenance, management and compliance costs while retaining an acceptable return.

This is especially important when interest rates are higher. A property operating on a narrow margin can quickly become unviable following an unexpected repair, void period or mortgage-rate increase. A sensibly priced, higher-yielding property is better able to withstand these normal operating pressures.

Regional yield figures can help investors shortlist locations, but they cannot establish the viability of an individual property. Investors must verify the achievable rent, recent comparable sales, tenant demand, condition, licensing requirements and management costs at property and street level before purchasing.

Affordability matters to capital performance as well as rental income. Properties that remain within reach of local owner-occupiers will attract a wider future buyer market than specialist investments priced mainly for landlords.

That liquidity reduces exit risk. A well-located house in an affordable employment area appeals to a broad market, including first-time buyers, families and investors, rather than relying on one narrow category of purchaser. Conventional houses in established residential areas also tend to appeal to a wider range of mortgage lenders than specialist or investor-led property.

Affordability also provides greater scope for property values to rise in line with local wages over time. Markets where prices have already moved far ahead of earnings typically offer lower yields and are more sensitive to changes in mortgage affordability.

Positive regional data should not be converted into a blanket recommendation to buy anywhere in the North East, North West or Wales.

Some locations are affected by limited employment opportunities, substandard housing stock, weak tenant demand or intensive management requirements. Others contain an oversupply of apartments or specialist properties that is not reflected in regional averages.

The best opportunities are concentrated in micro-markets supported by expanding employment, transport, universities, hospitals, established amenities and a limited supply of the property type tenants actually want.

Investors should also consider where a market sits in its property cycle. An affordable market with improving employment, infrastructure and demand can provide both income and future growth potential.

By contrast, a location may remain cheap for structural reasons. A low purchase price alone does not create a credible growth strategy. Investors must assess the fundamentals of each market and confirm that demand is expanding and the area is positioned to benefit from sustained regeneration, inward investment and economic growth.

Entering the right market at the right stage of its cycle is likely to have a greater influence on long-term investment performance than any single policy announcement or short-term headline.

Selected regional markets offer lower entry prices, strong rental demand and yields capable of covering finance and operating costs. The best opportunities are found in local economies with stable employment, affordable rents and a broad resale market, giving investors sustainable income and realistic potential for capital growth.

Office for National Statistics Private rent and house prices, UK – July 2026
Paragon Bank Buy-to-let rental yields increase in Q1 2026
Rightmove New record rents as rental supply falls for first time since 2022
SmartLandlord 2026 UK Buy-to-Let City Market Guide
SmartLandlord 2026 UK Buy-to-Let Town Market Guide