Overseas Landlords Shun The UK, As Tax Changes Bite

Claudine Rigal
Juillet 17, 2017

It also shows that just 5 per cent of British homes are now owned by foreign landlords compared to 12 per cent in 2010.

The proportion of overseas-based landlords who own homes across Britain has slumped to a seven-year low, said the country's largest letting agent.

But there is some regional variation with the South West of England seeing rents for new tenancies increasing by 4.6% year on year to an average of £786, the highest annual rise, according to the Countrywide monthly lettings index. They were the biggest group of overseas investors in London until 2014.

But now overseas landlords have been put off by higher tax bills and lower expectations of house price growth in the capital, which until recently had boomed for several years. According to Countrywide's data, in 2010, more than one in four, or 26%, of properties were owned by landlords based overseas.

Following the vote to leave the European Union in 2016, there had been some suggestions that falls in sterling could attract more foreign investors - as the price of property in Britain would look relatively cheap.

The proportion of let properties owned by overseas landlords is at its lowest in nearly a decade, according to latest data. London still has the largest percentage, followed by the South East (5%). Scotland, Wales and the Midlands have the lowest at 3%. The average overseas based landlord earnt a significantly higher sum than their United Kingdom counterparts, taking 35 per cent more in rent a year ago than one living in the UK. They earnt £5.4billion in rent over the last 12 months, 11% of the £50.6billion paid by private tenants in Britain.

Research Director at Countrywide, Johnny Morris, said: "The growth of the private rented sector since 2010 has not been driven by overseas investors".

Tax changes that have increased the amount overseas investors have to pay have been blamed for the drop, including capital gains tax payable in Britain, higher stamp duty rates and annual taxes that overseas company's owning properties in United Kingdom have to pay.

Prime central London also saw falls, from 31% in 2010 to 23% in 2017.

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