Data from more than 250,000 monthly product searches through price comparison websites powered by Twenty7Tec showed seven in 10 BTL investors looking for a mortgage in Q3 2015 based their search on a property valued below £250,000.
This was up by 17 percentage points from 53 per cent in Q3 2014 and the highest figure seen in two years, since Q3 2013.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “As rental demand remains strong nationwide, opting for a cheaper property can result in more attractive yields.
“It appears many landlords are looking to invest in areas outside the south of England, where property prices won’t hold them back from making a profit.”
A year ago, almost half – 44 per cent – of landlords were searching for mortgages on properties priced between £250,000 and £499,999.
This proportion has fallen sharply over the past 12 months, down to just a quarter in Q3 2015.
David Wilson, managing director of Newcastle-based NE Money, said: “Where I am based has some of the lowest property prices in the North East, so we see a high demand for buy-to-let mortgages from people who live in the North East and from those who don’t.
“A lot more BTL investors are more prudent in terms of their investment model and are spreading their risk, and not just buying something because it is on their doorstep.”