Number of overseas landlords operating in UK property falling since 2010

by Gary Whittaker

Over the last ten years, and particularly since the start of this decade, there has been a swelling in the number of people who choose to live in rented accommodation rather than buying their own home. 

This has helped to create a reality in which more than 4.5 million households are now privately let. In the space of just a decade, more than two million homes were added to the private rented market. But while this has been happening, the number of investors from overseas has been seeing a surprising fall. 

Back in 2010, when the rented sector was just starting its rise to prominence, as many as 12 per cent of the privately let homes in the UK were owned by investors from other countries. However, in the seven years since, this proportion has taken a hit, and according to Countrywide, they now account for only five per cent of private rents. 

London has experienced the sharpest drop in this regard, with Countrywide stating that only one in every ten rented properties is now owned by a foreign investor. This is a real decline when we consider that in 2010, as many as a quarter of all rented properties had overseas owners. 

The reasons for this are simple, it's more expensive to buy in the UK than it had been in the past. Overseas investors previously enjoyed some tax breaks and fantastic yields, but higher Stamp Duty charges and income tax have, to some degree, made it more expensive to buy the homes they would have targeted in the past. 

Johnny Morris, research director at Countrywide, said: "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, overseas investors also saw the removal of capital gains tax exemptions in 2015," he added.  

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09-August-17General Lettings News