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Landlords focus purchase activity on secondary towns and cities

Milton Keynes hero.jpg

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

Data from Paragon’s own lending activity revealed a strong increase in completions in city and town centre postcodes during 2021, up 100% on 2020.

The strongest increases were seen in locations outside of the UK’s major city centres. Aside from London and Manchester, the top 10 highest growth locations in urban completions were in secondary towns and cities.

The highest percentage increase was recorded in Milton Keynes, which experienced a 667% increase in completions in 2021 compared to the previous year. 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%).

Location 2021 % change vs 2020
Milton Keynes 667%
Bristol 300%
Manchester 300%
Luton 258%
Plymouth 183%
Stoke 157%
Northampton 133%
London 95%
Cardiff 70%
Nottingham 64%
Source: Paragon

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.

Zone

2021 % change vs 2020

Zone 1 38%
Zone 2 93%
Zone 3 183%
Zone 4 13%
Source: Paragon

Paragon Bank Director of Mortgages Richard Rowntree 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.”

He 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.” 

For further information contact:

Michael Clarke
Head of Media Relations
Paragon Bank
Tel: 07740090746
www.paragonbank.co.uk 

Notes to editors:

Paragon lends to private individuals and limited companies and has mortgages suitable for single, self-contained properties, as well as HMOs and multi-unit blocks. Paragon can accommodate higher aggregate lending limits and more complex letting arrangements including local authority leases and corporate leases along with standard ASTs.

Paragon introduced its first product aimed at the professional property investor in 1995 and is a member of UK Finance, the Intermediary Mortgage Lenders Association (IMLA), National Landlords Association (NLA) and the Association of Residential Letting Agents (ARLA). 

Paragon Bank PLC a subsidiary of the Paragon Banking Group PLC which is a FTSE 250 company based in Solihull in the West Midlands. Established in 1985, Paragon Banking Group PLC has over £12 billion of assets under management and manages over 450,000 customer accounts.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551