Overseas landlords are driven from United Kingdom by tax changes

Pauline Gross
July 17, 2017

This is the lowest proportion in its records going back to 2010, when overseas landlords owned one in eight (12%) let properties.

Countrywide says the rapid growth in the size of the private rental sector in recent years is not down to a surge of foreign investors, and insists the proportion of landlords from overseas has in fact halved since 2010.

New research also released Monday by property search website Rightmove suggests that house sales have picked up in the year since the Brexit vote but price increases have been limited, rising by an average of just £300 in the month from June to July. In the prime central London market overseas based landlords owned 31% in 2010 but that is now down to 23%.

Tax changes appear to have discouraged some of them, while others have bought property in cheaper areas instead.

Across the country, London still has the biggest concentrations of overseas-based landlords, accounting for around one in 10, or 11%, of let homes there in 2017. Outside of London, Europeans at 37% remain the biggest group of overseas landlords.

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The proportion of Europe-based landlords in particular has dwindled, Countrywide said.

The percentage of European-based investors has been slowly falling over time. In 2010 they made up 39% of foreign investors, but they now account for 28%. Outside of these regions however, fewer than 5% of properties are let by an overseas landlord.

And since April 2012, companies buying property in the United Kingdom have also been liable for the annual tax on enveloped dwellings.

'As well as having to contend with increased stamp duty and the annual tax on enveloped dwellings, overseas investors also saw the removal of capital gains tax exemptions in 2015, ' he added.

However, would-be homeowners continue to face an uphill battle from British-based investors, whose numbers have continued to tick up in recent years to outpace their overseas counterparts, Countrywide found. "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, ' he pointed out.

Other reports by GizPress

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