The most recent research from Countrywide has revealed that there has been a rise in the number of London based investors looking to purchase buy-to-let properties outside of the capital.
Figures from the report show that the proportion of investors from London buying outside of this location hit 50% in 2017. This is compared to just 19% in 2011.
In the last year, London investors purchased 22,296 homes outside of the capital, a rise from 3,311 in 2010. This was more than the number of homes sold in Manchester and Birmingham combined in the last year, which totalled 21,951.
A record number of investors from London are looking North to find greater yields and lower stamp duty rates. The East however has the highest proportion of London landlords in total, with 26% sold to an investor from the capital.
9% of homes sold in the North were sold to a London landlord. Just 12% of homes in April were purchased by an investors-almost a record low.
When purchasing a property outside of the capital, investors from London are substantially cutting their stamp duty bills. When buying in the capital, landlords face an average bill of £40,400, when compared to an investors buying outside of London.
In fact, the average stamp duty bill for an investor buying in London is 73% greater than compared to the pre-stamp duty changes. Outside of London, this number is only 8% higher.
Average rents of a new let in Great Britain increased to £936pcm in April, £4 greater than last year. There are 11% more homes on the market in comparison to last year, with rents in London falling for the sixth straight month and by 3.4% year-on-year.
Johnny Morris, Research Director at Countrywide, observed: ‘“In response to slower price growth and government tax hikes, London landlords are looking further than ever to find a return. Lower entry costs and higher yields outside of the capital are enticing investors to look further afield than they have previously.’
‘Rental growth remains low across Great Britain. Mostly driven by London where rents have fallen for the sixth consecutive month. The repercussions of the stamp duty rush are still playing out in the rental market as stock levels continue to remain high. But with fewer investors buying in the capital we will likely see stock levels fall, driving future rental growth,’ Mr Morris added.