Professional landlords in the UK are concentrating investments in their home regions rather than pursuing higher yields elsewhere, according to new research from Redwood Bank.
Analysis of landlord investment patterns between 2021 and 2026 shows professional investors are increasingly focusing on markets where they have local knowledge, despite higher interest rates, regulatory changes and evolving tenant demand.
The East Midlands recorded the largest shift, with a 15.1% increase in investors purchasing properties in their local area. The South West followed with a 14.2% rise in local investment over the five-year period.
Wales represented the only exception to the trend, with a 9.4% decline in local investment as landlords expanded portfolios into the neighbouring South West region.
Operational focus
Tom Worbey, senior product manager at Redwood Bank, said the buy-to-let market has become more complex 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,” he said.
“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.”
The findings suggest landlords are prioritising operational expertise and long-term investment quality over headline yields. This shift comes amid broader changes to the property investment landscape and ongoing regulatory reforms affecting the sector.
Portfolio strategy
Worbey noted that professional landlords now approach investments more like business owners than in previous years. “They’re balancing income, long-term growth, operational efficiency and exit strategy together rather than making decisions based on yield alone,” he said.
The bank said the trend has implications for lenders, who need to assess borrowers’ wider strategies and experience rather than focusing solely on individual properties. “As landlord portfolios become more sophisticated, and more targeted, lending decisions need to reflect that,” Worbey added.
The shift towards regional concentration suggests the buy-to-let sector is maturing, with investors prioritising sustainable business models over geographical diversification in response to market conditions and regulatory pressures.
