Overseas Landlords In Rush To Quit Buy To Let

Expat and foreign landlords are leaving the UK buy to let market in huge numbers, according to new data.

In 2010, landlords based overseas owned 15.5% of the UK’s private rented homes.

But this number has plunged by more than half to a record low of just 5.8% in 2018, says data from top-end estate agency Hamptons International.

The rush to quit is nationwide, with every region reporting a downturn in foreign buy to let ownership.

The impact is biggest in London.

In 2010, one in four buy to let homes in the capital were owned by overseas landlords. This number has fallen to one in 10 in 2018.

Despite the drop, says the Hamptons International study, London remains the UK region with the highest number of private rented properties with overseas owners.

Tax and Sterling woes impact profits

Most of the overseas-based landlords come from Western Europe (34%), followed by Asia (20%) and North America (13%) and the Middle East (11%).

“The proportion of homes let by an overseas based landlord has more than halved since 2010,” said Aneisha Bishop, the firm’s head of research.

“Sterling’s depreciation since 2016 undoubtedly makes it cheaper for international buyers to purchase property in Great Britain.  However, the conversion of pounds back into local currency means additional costs which cut into an overseas landlords’ monthly income.  This combined with a harsher tax regime for overseas investors is dissuading some international investors from entering the rental market.

“Throughout this year rental growth has been sluggish averaging 1.5% and only passing 2.0% on two occasions.  Affordability is not just an issue for those looking to buy a home, but impacts tenants paying rent too.  And these affordability barriers will continue to keep a cap on rental growth in the future.”

Overseas landlords in the UK by region

Region Proportion of overseas landlords (2018) Change since 2010 Change since 2016
London 10.50% -15% -5%
Yorkshire and the Humber 6.70% -4% 0%
South East 6.10% -10% -3%
Scotland 6.10% -5% -2%
South West 5.60% -5% -1%
East 5.60% -3% -2%
North West 5.40% -3% -1%
North East 5.30% -6% -2%
West Midlands 4.40% -2% -2%
East Midlands 3.50% -6% -1%
Wales 3.30% -3% -3%

Source: Hamptons International

Leave a Comment