Proportion of overseas landlords hits record low

'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', says Countrywide...

The proportion of overseas-based landlords in the UK has hit a record low, according to new research by Countrywide.

Just 5% of the homes let across the country so far this year are owned by foreign landlords, down from 12% in 2010.

In London, the proportion has tanked from 26% to 11% over the same period, while PCL has seen the figure fall from 31% to 23%. Outside London and the South East, less than 5% of homes are let by an overseas landlord, reducing to just 3% in Scotland, Wales and the Midlands.

The analysis shows that European-based landlords have been disappearing fastest of all; having made up 39% of all overseas landlords in London seven years ago, they now account for just 28% and have been overtaken as the largest group by those based in Asia (33%). North Americans are the next biggest, with 10%, followed by Middle Eastern landlords (9%). Europeans are still the largest group outside of the capital, with 37%.

Countrywide’s index recorded a 1.1% rise in average rents across the UK in June, with the average now standing at £950 pcm. London was the only region to see rents fall year-on-year, by -0.8%.

Johnny Morris, Research Director at Countrywide: “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.”

  • Proportion of overseas based landlords
Year GB Greater London
2010 12% 26%
2011 11% 22%
2012 9% 20%
2013 9% 18%
2014 9% 19%
2015 8% 16%
2016 7% 16%
2017 YTD 5% 11%
  • Proportion of overseas based landlords by region (2017)
Region Proportion of overseas landlords
London 11%
South East England 5%
Yorkshire and the Humber 4%
East of England 4%
North East England 4%
South West England 4%
North West England 4%
West Midlands 3%
Wales 3%
Scotland 3%
East Midlands 3%
  • Where overseas landlords are based (2017)
Continent London Landlords GB (exc. London) Landlords
Asia 33% 15%
Europe 28% 37%
North America 10% 13%
Middle East 9% 12%
Oceania 8% 16%
Africa 7% 5%
South America 5% 2%
  • New lets (pcm)
Region Ave Rent Jun-17 Ave Rent Jun-16 Ave Rent May-17 YoY
Greater London £1,673 £1,687 £1,650 -0.8%
East of England £931 £905 £923 2.8%
South East England £1,022 £1,011 £1,018 1.1%
South West England £786 £752 £778 4.6%
Midlands £665 £650 £661 2.3%
North £628 £614 £623 2.3%
Scotland £632 £623 £626 1.4%
Wales £645 £644 £635 0.1%
Great Britain £950 £939 £940 1.1%
  • Renewals (pcm)
Region Ave Rent Jun-17 Ave Rent Jun-16 Ave Rent May-17 YoY
Greater London £1,701 £1,643 £1,701 3.5%
East of England £897 £832 £900 7.8%
South East England £981 £950 £977 3.3%
South West England £759 £724 £753 4.8%
Midlands £637 £623 £636 2.2%
North £594 £586 £595 1.4%
Scotland £597 £592 £589 0.9%
Wales £616 £622 £614 -0.9%
Great Britain £929 £899 £928 3.3%

Source: Countrywide

Image: Eirian Evans (CC-BY-2.0)