The most recent report from Countrywide has revealed that the number of overseas-based landlords in the UK has slumped to a record low in 2017.
In all, overseas landlords own 5% of all homes let in Great Britain this year, down from 12% in London during 2010. London has experienced the most profound growth, with one in ten properties let by an overseas landlord. This was down from 26% in 2010.
Prime central London also saw falls, from 31% in 2010 to 23% in 2017.
Overseas Landlord Falls
The percentage of European-based investors has been slowly falling over time. During 2010, landlords from this continent made up 39% of all overseas landlords in the capital. Now however, they make up 28%.
Asia based landlords now account for 33% of overseas investors in London, followed by Europeans, North Americans (10%) and those from the Middle East (9%).
Outside of the capital, Europeans remain the largest group of overseas landlords, at 37%.
For all regions, the number of overseas-based investors has dropped since 2010. London still has the largest percentage, followed by the South East (5%). Outside of these regions however, fewer than 5% of properties are let by an overseas landlord.
The typical overseas-based landlord made 35% more in rents last year than one living in the UK. Those from overseas earned £5.4bn during the year. More than half of the income received from overseas landlords came from rental properties in London.
Johnny Morris, Research Director at Countrywide, observed: ‘The growth of the private rented sector since 2010 has not been driven by overseas investors. A steady increase in foreign investors’ tax bills combined with more recent falling expectations of price growth in London has led to a decline in foreign investment in buy-to-let.’
‘As well as having to contend with increased stamp duty and the annual tax on enveloped dwellings (ATED), overseas investors also saw the removal of capital gains tax exemptions in 2015. Rental growth remained at 1.1% in June. Falls in London were off-set by higher growth across the rest of the country. The fall in the capital was driven by lower rents in the outer areas of London as the ripple effect from falling rents in Central London continues,’ he added.