London's share of property investment has dropped by a third over the past year despite an increase in home loan approvals, Britain's biggest specialist buy-to-let broker says. Research from Landlord Mortgages shows that investors have been deserting the British capital for more lucrative opportunities elsewhere in the country. In the 12 months to the end of last month, 8.56 per cent of all rental property purchases were in London - 5 per cent down from 2003-04. The brokerage said levels of investment in London were surprisingly low considering government figures showed that 15 per cent of Britain's housing stock was there. London was losing investors because it had Britain's most expensive buy-to-let properties, it said. An average investment property there costs GBP223,997 ($3.05 million). These high prices have reduced yields. Savills Research said net returns in London were 3.5 per cent compared with 5 per cent nationally. Landlord Mortgages managing director Lee Grandin said: 'Despite the fact that London has traditionally had a strong buy-to-let market, over the past few years investors have started looking elsewhere. The capital is simply too expensive to provide the type of yields and potential capital appreciation that investors are looking for. 'If a landlord took the average 15 per cent deposit they would need to put down on a London property, which is GBP33,599, and looked at buying in other parts of the country, they would be able to get much better value for money. If they invested in the Northeast, Scotland, the West Midlands or Yorkshire and Humberside, they would be able to buy two properties rather than one.' The brokerage said the most popular region over the past year was the southeast, which attracted 22 per cent of investors partly due to an influx of London landlords looking for bigger profits. The Northwest, at 13 per cent, and East Midlands, at 10 per cent, were also popular. Mr Grandin said: 'Over the longer term, we believe the trend towards investors looking outside London for investment opportunities will continue.'