Is Devon, Cornwall or Bristol still worth buying as a buy-to-let in 2026?

At the citywide or regional average price, the maths says no, not as an income play. The South West's average buy-to-let yield is 4.1% (Land Registry HPI and ONS Private Rent and House Prices, May 2026), and at a 75% loan-to-value mortgage on the current average buy-to-let rate of 5.42% (Moneyfacts, 1 July 2026), the cash flow is negative before a penny of tax is due. That doesn't mean every South West property is a bad buy. It means an average-priced purchase, funded with an average-sized mortgage, doesn't clear as an income investment right now. If you're set on the region, you need a property priced meaningfully below average with rent meaningfully above average, verified against actual local listings rather than a marketed yield figure, or you need to be buying for capital growth rather than income. Most investors who run these numbers properly end up looking at a different region for income and treating the South West, if at all, as a long-term growth holding funded with a much larger deposit.

Why is the South West's rental yield so low compared to other regions?

Because South West house prices are high relative to what tenants pay in rent. The average South West property costs £362,800 (Land Registry HPI, May 2026) against an average rent of £1,234 a month (ONS Private Rent and House Prices, May 2026), giving a gross yield of 4.1%, among the lowest of any English region. Compare that with the North East, where Fleet Mortgages' Q1 2026 Rental Barometer puts the average yield at 9.8%, the highest in England and Wales, on much cheaper property. Some marketing material quotes a regional buy-to-let average nearer 6.6% (Fleet Mortgages, Q2 2026), but that figure reflects mortgaged completions across the whole region, including cheaper towns and postcodes, not the price an investor actually pays for an averagely priced South West home. If yield is your priority rather than lifestyle appeal or capital growth, the South West is one of the weakest regions in England to be buying into right now.

What is Section 24 and how does it affect a South West landlord?

Section 24 stopped landlords deducting mortgage interest as a business expense from April 2020. Instead, HMRC taxes your rental profit before interest relief, then hands back a flat 20% credit on the interest you actually paid. For a basic-rate taxpayer, that 20% credit roughly matches their 20% tax rate, so the practical impact is usually small. For a higher-rate taxpayer paying 40% tax, the credit only covers half the tax due on that portion of income, which is where the real damage happens. On an average South West buy-to-let bought at 75% loan-to-value, annual mortgage interest is actually larger than taxable profit before interest relief, so the 20% credit is capped at 20% of that lower profit figure rather than 20% of the full interest paid, with the unused balance carried forward. For a basic-rate landlord that capped credit exactly offsets the tax otherwise due, adding no extra tax this year. For a higher-rate taxpayer it adds roughly £188 a month on top of an already negative cash flow. Compare your own numbers against Manchester's Section 24 impact, where a stronger citywide yield leaves basic-rate landlords in profit, using our Section 24 tax calculator before assuming the tax treatment is the same everywhere.

How much stamp duty do I pay on a buy-to-let purchase in the South West?

On the South West's average property price of £362,800, a buy-to-let purchase in England carries a Stamp Duty Land Tax bill of roughly £26,280. That's made up of £8,140 in standard residential rates (0% to £125,000, 2% to £250,000, 5% above that) plus a 5% buy-to-let and second-home surcharge on the full purchase price, £18,140, which applies to any additional residential property costing £40,000 or more (raised from 3% at the October 2024 Budget). That bill needs to come from cash reserves on top of your deposit, before the property earns a single pound in rent. Use our stamp duty calculator to check the exact figure for the specific price you're considering, since the surcharge scales directly with purchase price and a cheaper-than-average South West property will owe meaningfully less.

South West BTL: even basic-rate landlords lose £393/month

You've spent years watching Section 24 quietly eat into your Manchester numbers, and the South West has started to look like the sensible alternative: solid demand, seaside and market-town appeal, tenants who stay for years instead of one. Before you redeploy a single pound of capital into Devon, Cornwall or the wider region, run the numbers on what buying an actually, averagely priced South West rental property does to your monthly cash flow. It's worse than anything Section 24 has done to your existing portfolio.

The South West's average buy-to-let gross yield is just 4.1%, against a £362,800 average property price. At today's mortgage rates, that turns into a £393-a-month loss for a basic-rate taxpayer, and Section 24 hasn't even been applied yet. For a higher-rate taxpayer, the loss deepens to £581 a month. That's a worse after-cost result than every region The Property Pundit UK has modelled so far this month, including the South East's £431 monthly loss (Property Pundit UK, 21 July 2026), because in the South West the deal fails before tax even enters the calculation.

The 4.1% yield behind the South West's reputation

The average property price across the South West was £362,800 in May 2026 (Land Registry UK House Price Index, published 22 July 2026), up 1.6% on a year earlier. The average private rent across the region reached £1,234 a month in the same month (ONS Private Rent and House Prices, UK, May 2026), up 5.0% annually. Divide one by the other and the gross yield is 4.1%, before a single cost is deducted.

That lines up with independent postcode-level estimates putting Bath and Exeter at 3% to 5% (Shaded Canvas UK Rental Yield Statistics, 2026), well below the national average of roughly 5.5% to 6%. Some regional marketing material quotes a higher figure nearer 6.6% (Fleet Mortgages Rental Barometer, Q2 2026), but that number tracks buy-to-let mortgage completions across the entire South West, including cheaper towns far from Bristol or the coast, not the price an investor pays for an averagely priced regional property. It's the same gap our Liverpool yield spotlight found between a marketed figure and the citywide reality, just running in the opposite direction: there, the marketed number was too optimistic. Here, the reassuring regional-average number is the misleading one.

So if you're comparing the South West against a region like the North East, where Fleet Mortgages puts the average yield at 9.8% (Q1 2026 Rental Barometer), you're comparing a genuine 4.1% return against one that's more than double it, not a like-for-like regional gap.

What a 75% loan-to-value purchase actually costs each month

Take that £362,800 purchase at 75% loan-to-value: a £272,100 mortgage against a £90,700 deposit. The average fixed-rate buy-to-let mortgage stood at 5.42% on 1 July 2026 (Moneyfacts). On an interest-only basis, standard for most buy-to-let lending, that's £1,229 a month in interest alone, against rent of £1,234. Add a 12% letting agent management fee (£148), a one-month-a-year void allowance (£103), landlord insurance of around £24 a month (based on a median annual cost of £284.75, NimbleFins, 2026) and a 10% maintenance reserve (£123), and monthly outgoings come to £1,627. Against £1,234 in rent, that's a loss of £393 a month, before tax is even calculated. Check your own figures with our buy-to-let yield calculator.

This deal also fails most lenders' own affordability stress test before you'd even get to keep it. Rent of £1,234 against interest of £1,229 gives a rental cover ratio of just 100%, nowhere near the 125% to 145% most lenders require. To clear a 145% stress test at this rate, the mortgage would need to shrink to roughly £188,400, meaning a deposit of about 48% of the purchase price rather than 25%. Many higher-rate applicants wouldn't get this exact deal past underwriting in the first place, regardless of whether they wanted to hold it.

So before HMRC takes a single pound, the average South West buy-to-let purchase is already running at a substantial loss, one deep enough that a standard 25% deposit likely won't even secure the mortgage.

Section 24 deepens the loss for both tax bands

Since April 2020, mortgage interest is no longer deducted from taxable rental profit. Instead, HMRC taxes profit before interest relief, then hands back a flat 20% credit on the interest actually paid. On this property, annual rent is £14,808. Deduct the non-finance running costs (management, insurance, maintenance: £3,540 a year) and taxable profit before interest relief is £11,268. Annual mortgage interest is £14,748.

Because annual mortgage interest (£14,748) is larger than taxable profit before interest relief (£11,268), the 20% credit itself is capped at 20% of the lower figure, £2,254, not 20% of the full interest paid, with the unrelieved balance carried forward. A basic-rate taxpayer owes 20% of £11,268 (£2,254), against that same £2,254 credit, for a net tax bill of £0 this year. Add that to the £393 monthly shortfall already there before tax, and a basic-rate landlord is still losing £393 a month. A higher-rate taxpayer owes 40% of £11,268 (£4,507), less the same capped £2,254 credit, for a net tax bill of £2,253 a year, or £188 a month. Add that to the same £393 shortfall and the property is losing roughly £581 a month. Run your own numbers through our Section 24 tax calculator, and see how the picture compares with Manchester's buy-to-let Section 24 numbers, where a stronger citywide yield leaves basic-rate landlords in modest monthly profit.

The maths, in one place:

Purchase £362,800 at 75% LTV · Rent £1,234/month · Gross yield 4.1% · Cash flow before tax −£393/month · Basic-rate tax £0/month, net −£393/month · Higher-rate tax £188/month, net −£581/month · Rental cover ratio just 100%, against a 125–145% lender requirement.

So the Manchester pattern, where only higher-rate taxpayers get squeezed by Section 24, doesn't hold here. At the South West's regional average price, the deal fails to clear for either tax band, and Section 24 only widens an already serious gap.

The stamp duty bill and an EPC deadline that hits older stock hardest

A £362,800 buy-to-let purchase in England also carries a one-off Stamp Duty bill of roughly £26,280, made up of £8,140 in standard rates plus an £18,140 buy-to-let surcharge at 5% of the full price (raised from 3% at the October 2024 Budget, applying to any additional residential property costing £40,000 or more). That's on top of the monthly losses above, not instead of them, and it needs to come from cash reserves before the property earns a penny.

Much of the South West's rental stock, particularly the stone-built cottages and period terraces common across Devon, Cornwall and Bath, will also need work to meet the government's confirmed requirement for rented homes in England and Wales to reach an Energy Performance Certificate rating of C or above by 1 October 2030 (GOV.UK Warm Homes Plan, 2026). Industry cost analysis puts the average spend at just under £6,900 per property, with a £10,000 cap, and solid-wall older homes, more common in the South West than in most English regions, tend to sit at the expensive end of that range rather than the cheap end.

So if this property is already losing £581 a month after tax as a higher-rate landlord, an unplanned five-figure EPC bill arriving before 2030 lands as a second bill stacked directly on top of the one you're already funding out of pocket every month, not a manageable one-off.

What this means for you

The maths points toward one of three moves if the South West is genuinely on your shortlist. Buy meaningfully below the regional average price in a location with verified above-average rent, checked against real local listings rather than a marketed regional yield figure, because the average-price purchase doesn't clear at any tax band on the numbers above. Structure the purchase to satisfy a lender's rental cover ratio without over-leveraging, which in practice means closer to a 50% deposit than the standard 25%, given the rental cover ratio problem above. Or accept that the South West, at today's prices and rates, is a capital growth and lifestyle purchase rather than an income one, and price your expectations accordingly rather than trusting a headline yield table.

Frankly, if you're weighing a South West purchase against redeploying capital from an existing Manchester or Liverpool property, this region is a downgrade dressed up as an upgrade at the moment. Most landlords who run these numbers properly, rather than trusting a regional headline yield, end up either hunting for a genuinely underpriced South West postcode with strong local rental demand or looking at a higher-yielding region entirely. Very few decide the regional average is worth buying once they've modelled the after-tax cash flow month by month.