Landlords drawn by the prospect of bumper profits are swapping London flocking to Blackpool, with the popular seaside resort’s rental yields soaring into double digits – close to twice what investors can expect to earn in the capital.

Data supplied by estate agency Hamptons shows that the proportion of homes in Blackpool purchased by Londoners has increased significantly, up from 4% in 2019 to 9% this year.

Most new buyers are grabbing investment properties in a bid to make the most of both high rental income and affordable property prices.

In contrast, buy-to-let investment in the South East has been falling steadily over the course of the last 10 years in the face of soaring house prices.

As of 2014, almost half of all buy-to-let purchases in the UK – 46 % – were in London and the South East.

This figure has now fallen to just 32%, while the proportion of landlord purchases in regions including the North East, North West, and Yorkshire & Humber has risen by 13 points.

Blackpool offers a clear perk for landlords when it comes to stamp duty, where on average they will pay £6,816 in stamp duty on average.

In London, the average payment is an eyewatering £46,633, even before the additional surcharges for second homes and buy-to-let properties are applied, buy-to-let bank Paragon says. The enormous disparity appears to be pushing more London investors to the Lancashire town.

Stephen Bagdoans, a managing agent at Blackpool-based Kenricks Commercial, told the Telegraph: “It’s simple supply and demand. Yields are going up because the Government has been cracking down on landlords. If you’re being hit by a stick, you move out of the way.”

In addition the area is attracting fresh investment, with several government offices relocating there, with public sector workers demanding higher-end properties.

Mr Bagdoans added: “The council makes sure properties are up to standard and decent. It’s one of the reasons why we have such a high quality of rental accommodation in the area,” he said. “Around half of the properties we manage are privately let, while the rest are let to social tenants.”

Bruce Haagensen, the CEO of Newcastle-based advisory service GB Landlords, added: “Blackpool is the big Bed & Breakfast benefits capital of the North West.

“It’s a traditional seaside holiday resort where a lot of hotels and boarding houses have been converted into homes for benefit claimants.”

Referring to relatively low property prices, he added: “London landlords look at the numbers, not the locations.

“They see that what they can buy for their money in Blackpool is much more than what they could get for the same amount in London.”

Nationally, the average rental yield for buy-to-let properties is currently 6.7%, based on a typical property value of £343,356 and rental income of £23,076. However, Blackpool significantly exceeds this, with some properties offering annual near to 10%.

Nevertheless, Louisa Sedgwick, mortgage director at Paragon, sounded a note of caution.

She stressed: “Yields provide a snapshot of a property’s income generation potential, but they don’t reflect factors like capital appreciation, improvements in rental income from property upgrades, or the impact of leverage for landlords who use a mortgage to buy property.”

In addition to these factors, landlords also need to consider other operating costs, including management fees and stamp duty.

Ms Sedgwick added: “Assessing return on investment provides a more complete picture. A key consideration for landlords is the loan-to-value ratio.

“Typically, landlords will put down at least 25% as a deposit, which not only secures lower mortgage rates but also means that a property’s return on investment is based on the initial deposit outlay.”