As more UK property investors enter the market, many are wisely looking beyond the London bubble. The Northern property market is emerging as a prime location for buy-to-let investments, offering competitive yields and growth potential.

Omkar Hushing, Head of Buy-to-Let and Specialist Lending Underwriting at Market Financial Solutions, explains why the North could be home to the next major property investment hotspots—and why Labour’s New Towns Taskforce could make the region even more attractive for forward-thinking landlords.

Why It’s Not the End for Buy-to-Let Investors

Despite the challenges facing landlords today, including the upcoming Renters’ Rights Bill, talk of a mass exodus from the buy-to-let market is greatly exaggerated. While 37% of landlords intend to sell within the next year, according to Pegasus Insight, 22% still plan to remain in the sector indefinitely.

Although headlines often focus on negative statistics, there is still strong interest in property as a wealth-building strategy. Our own research at Market Financial Solutions found that:

• 33% of people would like to own a buy-to-let property in the future.
• 24% would consider investing in buy-to-let before buying their own home.
• 60% believe that property remains a solid strategy for building long-term wealth.
• If they won £1 million, 58% would invest in property.

Clearly, buy-to-let remains attractive to many, particularly as regional property markets across the UK continue to present exciting opportunities.

The Northern Property Market: A Growing Buy-to-Let Hotspot

One of the clearest trends from our survey is the willingness of investors to buy outside their local area. 62% of prospective buy-to-let investors said they would buy elsewhere in the UK for better value. In London, that figure rises to 79%.

This shift in focus is driving increased attention towards property investment opportunities in the North. Data from Hamptons shows that in the first four months of 2025, 40% of buy-to-let purchases were in the Midlands or the North. Gross yields are strongest in:

• North East: 9.3%
• North West: 8.2%

Specific Northern property investment hotspots include:

• Redcar & Cleveland: 50% of recent home purchases were by landlords.
• Darlington: 40%
• Derby: 39%
• Gateshead: 38%

For landlords looking for both yield and growth, these regions offer compelling returns.

Regeneration Projects and Labour’s New Towns Could Fuel Future Growth

What’s more, government-backed regeneration schemes are set to give many Northern towns a fresh lease of life. Proposed funding for deprived areas could benefit cities like Manchester, Liverpool, Sunderland, and Newcastle.

York is also a key area to watch. The York Central regeneration project aims to deliver:

• 2,500 new homes
• 6,500 new jobs
• £1.1 billion in added gross value for the city

Looking further ahead, Labour’s New Towns Taskforce is actively assessing sites for entirely new communities. Over 100 locations have been put forward by councils, developers, and landowners.

Potential new towns in the North include:

• Poppleton, near York
• Extensions on the outskirts of Manchester and Leeds
• Locations in Northumberland, identified by consultancies like WPI Strategy

While these new towns won’t begin development until 2029, savvy investors are already keeping a close eye on early opportunities.

How UK Property Investors Are Preparing for the Future

Our research revealed that would-be investors aren’t just dreaming—they’re taking active steps to become landlords:

• 44% are working additional hours to save
• 30% have taken on second jobs
• 52% are saving monthly specifically for buy-to-let
• 33% are living with friends or family to cut costs
• 24% have sold other assets to fund a property purchase
• 28% have used inheritance funds to help finance an investment

In fact, 54% of aspiring landlords are actively exploring how to get into the market, and 68% believe buy-to-let ownership is a realistic goal for them.

The Buy-to-Let Market’s Next Chapter

As existing landlords exit and new investors enter, the UK property market is entering a period of transition. Buy-to-let in the North of England is set to play a key role in the market’s evolution, supported by strong yields, regeneration projects, and new-build developments.

For those preparing to step into this market, partnering with lenders who understand the needs of first-time landlords and regional property investors will be critical to success.

Summary:

• Northern UK regions offer some of the best buy-to-let yields in the country.
• York, Manchester, Leeds, and Newcastle are prime areas to watch.
• Labour’s New Towns initiative could unlock long-term growth potential.
• A new generation of determined investors is ready to embrace these opportunities.

For property investors willing to look beyond the London bubble, the North of England could well be the next great buy-to-let frontier.