Fewer overseas landlords investing in UK after tax changes

The percentage of overseas investors looking to purchase buy-to-let property in Britain has fallen significantly as a result of the recent tax changes levied on the sector.

Research from agency group Countrywide reveals that only 5% of UK properties are now owned by someone from overseas. This is a fall of over half of the 12% of investors from overseas taking out landlord insurance on a property seen seven years ago.

Declines

The largest decline in foreign buyer activity has been seen in London. Here, 11% of property acquisitions are now from overseas buy-to-let investors, down from just over 25% in 2010.

What’s more, the investor demographic in London has also changed since the beginning of the decade. Asians now make up the largest segment of overseas investors in the capital. The number of European owners has fallen from 39% to 28% in the last seven years.

North Americans made up 10%, while landlords from the Middle East accounted for 9%.

Fewer overseas landlords investing in UK after tax changes

Fewer overseas landlords investing in UK after tax changes

Rental Returns

Despite the fall in ownership rates from overseas investors, the average landlord from outside the UK earned 35% more in rent last year than those living in Britain, according to the Countrywide data.

In all, this amounts to around £5.4bn in rent during the past 12 months – 11% of the £50.6bn paid by private tenants in Britain.

Johnny Morris, research director at Coutrywide, noted: ‘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.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/overseas-landlords-shun-uk-housing-market-after-tax-hikes

 

 

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