Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Landlords concentrate investment in home regions, Redwood Bank research finds

Professional landlords are increasingly investing in markets they know well rather than spreading their portfolios across the UK, according to research by Redwood Bank. The bank's analysis of landlord investment patterns between 2021 and 2026 found professional investors becoming increasingly concentrated within their home regions.

Redwood said the findings suggested landlords were becoming more discerning about 'operational expertise, local market knowledge and long-term investment quality rather than simply pursuing the highest headline yields'.

Regional picture: East Midlands and South West lead

The East Midlands saw a 15.1% increase in investors buying in their local area, closely followed by the South West, which recorded a 14.2% uplift over the past five years.

Wales moved against the trend, with a 9.4% drop in local investment. According to Redwood, landlords in Wales have instead been seeking to extend their portfolios in South West England.

'Local knowledge has become a genuine competitive advantage'

Tom Worbey, senior product manager at Redwood Bank, said the buy-to-let market had 'changed significantly over the past five years', with professional landlords now 'operating in a much more complex environment, with higher borrowing costs, greater regulation and increasing expectations around property management'.

'In that environment, local knowledge has become a genuine competitive advantage,' he said. '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.'

Worbey added that professional landlords were 'thinking much more like business owners than they were a decade ago', balancing income, long-term growth, operational efficiency and exit strategy 'rather than making decisions based on yield alone'. The regions landlords invest into, he said, are 'a key driver and output of this'.

What it means for regional agents

The findings underline the importance experienced landlords attach to relationships with local agents and contractors, a point Worbey highlighted directly. For letting agents and inventory clerks working in the East Midlands, the South West and other regional markets, the research suggests landlords concentrating in their home regions are prioritising local market knowledge and operational expertise over headline returns.