Proportion of Overseas Landlords Hits Record Low in UK

The proportion of overseas landlords in the UK hit a record low in 2017, according to new analysis from Countrywide.

Just 5 per cent of homes let in Britain were owned by overseas landlords in 2017, a figure down from 12 per cent in 2010. London saw the largest fall in foreign investors, with just 11 per cent of homes let this year in the capital owned by an overseas landlord. This marks a sharp contrast to the 26 per cent in 2010. In prime central London the drop was also significant, down to 23 per cent in 2017 from 31 per cent in 2010.

The number of European based landlords has been gradually falling over time, more so than any other nationality. In 2010, 39 per cent of overseas landlords were European, marking London’s largest overseas investment group. Their number has now dropped to just 28 per cent, with Asia based landlords taking the top spot. 33 per cent of the capital’s overseas landlords are Asian, followed by 28 per cent being European, 10 per cent North American and 9 per cent Middle Eastern.

Across the UK the proportion of overseas based landlords has fallen in every region. London has the highest proportion, at 11 per cent followed by the South East at 5 per cent. Outside London and the South East, less than 5 per cent of homes are let by an overseas landlord. The average overseas based landlord earnt a significantly higher sum than their UK counterparts, taking 35 per cent more in rent last year than one living in the UK.

Research Director at Countrywide, Johnny Morris, said: ‘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 per cent 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.’