"As landlords and brokers navigate the early months of 2026, there’s a real need to recognise the regional nuances at play when making decisions about their buy-to-let strategies"
- Darrell Walker - Chetwood Bank
Buy-to-let’s often spoken about as though it’s a single market - one consistent block that behaves uniformly across the country. In reality, however, landlord demand, portfolio performance, property values and borrowing strategies vary significantly by region and, in 2026, those differences are becoming even more pronounced.
It’s something that my regional BDMs and I see on a regular basis, and recent price data underlines this trend clearly as well. For instance, according to research by Zoopla, around half of the homes in the UK rose in value in 2025, but that growth was far from evenly distributed across the country.
What this means is that, as landlords and brokers navigate the early months of 2026, there’s a real need to recognise the regional nuances at play when making decisions about their buy-to-let strategies.
Opportunities beyond traditional hotspots
Some of the strongest opportunities for investors are currently outside the traditional hotspots. Wales, for example, delivered yields of 6.5% last year, while the North West provided yields of 6.9% driven by rents rising faster than prices. The North East also continues to stand out, offering the highest regional yields in the country at an average of 7.9%.
Experience of working in these areas suggests that lower average property values mean buyers are less exposed to borrowing constraints. As a result, landlords are targeting these areas where fundamentals look stronger than in more established buy-to-let markets.
Research by estate agents Savills supports this view, highlighting that regions with more affordable housing stock are better positioned to see steady growth as interest rates remain elevated.
For landlords, this indicates that, though every regional market is operating under the same regulatory and monetary constraints as others, there are some where fundamentals are leading to more sustainable rental income and capital appreciation.
Why some regions lag behind
Affordability pressures are now one of the most decisive forces shaping buy-to-let performance, but it only tells part of the story. Supply dynamics, economic fundamentals, and mortgage rate sensitivity all play important roles.
Local economic drivers are now playing a much more visible role as well. Employment patterns, infrastructure investment and local population growth all feed directly into housing demand. Cambridge, for example, has seen an uptick in the number of tech and biotech firms moving into the area.
As a result, rental demand and prices have both enjoyed growth in recent years, whereas nearby towns that do not boast the same employment opportunities are struggling to perform as well. Mortgage rates also amplify these differences. Higher-value properties are naturally more sensitive to changes in borrowing costs, so London and some parts of the South East have seen the greatest underperformance in recent years.
Other underperforming areas include the South East coast, which includes towns like Brighton and Eastbourne. Although these locations remain popular with renters, high property prices and rising borrowing costs have slowed capital growth, squeezing yields lower when compared to the national average.
While these regions retain long-term potential, investors operating there need to be selective and realistic about returns, especially if their strategies rely heavily on rental income rather than capital appreciation.
Navigating the rest of 2026
Success in 2026 depends on tailoring buy-to-let strategies to local market realities, rather than relying on national averages.
Focusing on areas with affordability and strong rental yields, rather than relying solely on capital growth, can provide stability in a high-interest-rate environment. However, paying close attention to local supply and demand trends can also reveal selective buying opportunities, even in markets that appear soft on the surface.
Financing these investments can present its own challenges, whether that’s due to tighter affordability criteria, changing rental stress tests or the complexity of portfolio and limited company borrowing. As such, working with brokers who can access specialist lenders and navigate more complex cases will be just as important as understanding regional differences when making investment decisions.
As the market moves onto a more stable footing in 2026, landlords who can balance these competing trends and adapt accordingly will be best placed to achieve sustainable success over the year ahead.
