The numbers tell a story the Buy-to-Let sector has been living for 10 years. The stamp duty surcharge introduced in April 2016 at 3% - and increased to 5% from 31 October 2024 in the Autumn Budget - on top of standard residential rates for additional property purchases has fundamentally redrawn where landlords put their money.

According to Louisa Sedgwick, managing director of mortgages at Paragon Bank (writing in Mortgage Solutions, 25 March 2026), the regional shift is stark. Southern England's share of BTL purchases has fallen from 56% in 2015 to just 38% by 2025. London alone dropped from 18% to 12%. The Midlands and North, by contrast, have grown to over 50% of landlord activity combined, with the North West gaining nearly 5 percentage points over the decade.

This isn't random drift. It's rational capital allocation in response to tax structure.

The working reality of that 5% charge

Here's what this means in practice. Take a property worth £250,000 in Manchester versus an equivalent property in Kensington (SDLT applies in England and Northern Ireland; Scotland and Wales have different transaction tax regimes):

Manchester purchase (current, March 2026):

- Standard residential SDLT on £250,000: £2,500 (0% on first £125,000; 2% on £125,001-£250,000)

- Additional property surcharge (5%): £12,500

- Total SDLT liability: £15,000

Kensington purchase (same value, same calculation):

- Standard residential SDLT on £250,000: £2,500

- Additional property surcharge (5%): £12,500

- Total SDLT liability: £15,000

The rate is identical. But here's the critical difference: Northern property yields are structurally higher. A £250,000 Manchester BTL property might generate 6-7% gross yield. The same capital in Kensington might deliver 3-4%. Over 10 years, that compounding yield gap makes the 5% surcharge at purchase feel less material when the property is generating better returns annually.

Sedgwick described the shift as "a defining moment" and noted that "10 years on, the data shows a clear and lasting rebalancing."

What this means for supply

The supply consequences are significant. Analysis cited by Hamptons suggests the surcharge contributed to 2.2 million fewer privately renting households in England. Sedgwick flagged the longer-term risk: "The long-term decline in investment into London and the South East could be storing up problems for future renters and exacerbate the supply-demand imbalance issue."

That's not a small caveat. BTL investors are responding to tax incentives with their capital - which is rational - but the unintended consequence is a widening geographic imbalance in rental supply. Areas with weaker yields now face reduced landlord investment.

What this means for your portfolio

If you're sitting on a concentration of southern or London properties, the decision to hold or to consolidate northbound has changed materially over a decade. Your liability on sale (CGT for residential BTL is 24% for higher-rate taxpayers, plus your local tax position) needs to be weighed against the yield opportunity in regions where landlord capital is now flowing.

This isn't advice - it's a framework. The rate is now 5% on the surcharge (increased from 3% on 31 October 2024). The threshold is any property beyond your main residence. The calculation depends on your individual tax position, the specific yield differential in your target regions, and your investment timeline.

Speak to your accountant about the regional composition of your portfolio and the tax consequences of any rebalancing strategy.