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One in 10 homes let by non-UK based landlords

The proportion of homes let in this country by overseas-based landlords has increased, new figures show.

The latest data from Hamptons International, part of the Countrywide Group, shows that the proportion of homes in Great Britain let by overseas-based landlords rose to 11% during the first 10 months of 2019, up from 7% during the corresponding period last year. 

The proportion of homes let by overseas-based landlords: 

Jan-Oct of each year

Great Britain

London

2010

14%

26%

2011

13%

23%

2012

11%

21%

2013

11%

19%

2014

10%

20%

2015

10%

16%

2016

9%

15%

2017

9%

15%

2018

7%

10%

2019

11%

18%

YoY Change

4%

8%

Source: Hamptons International

The increase in the proportion of homes let by overseas-based was primarily fuelled by areas in the South, with the East of England and London recording the biggest rise in the proportion of homes let by overseas landlords. 

The proportion of homes let by non-UK based investors in London and the East of England rose 8% year-on-year. The South East and the North East followed, both recording a 7% year-on-year rise.  

London had the highest proportion of homes let by overseas-based landlords at 18%, up from 10% during the first 10 months of 2018.  

Meanwhile, Wales had the lowest proportion of homes let by non-UK landlords (-2%) and was the only region to record a fall compared with 2018. 

Aneisha Beveridge, head of research at Hamptons International, said: “The proportion of homes let by overseas-based landlords rose for the first time in more than nine years. The East and London recorded the biggest increases.”

The depreciation of sterling is one of the main reasons why the proportion of homes let by overseas-based landlords has increased, partly because it is now cheaper for international buyers to acquire property in Great Britain than it was a few years ago.  

In many cases, the pound’s depreciation more than pays for the additional 3% stamp duty surcharge payable on second home purchases.

The average home in Great Britain cost £53,065 or 23% less than it did in 2014 for a US dollar buyer – solely due to a fall in the value of the pound. 

Meanwhile, the stamp duty bill on this second home purchase would be £9,140.  In London, the average property would save a US dollar buyer £107,030 compared with 2014. 

Beveridge added: “Sterling’s depreciation has made investment property in Great Britain more attractive to international investors. The average home cost 23% or £53,065 less than in 2014 for a US dollar buyer, solely due to the currency changes.

“Rental growth in the South outstripped rental growth in the North.  Rents in Great Britain rose 2.2% in October, but rents in the South East rose 3.9% compared with a -0.6% fall in the North.  This was the first annual rental fall in the North for 17 months.”

 The proportion of homes let by overseas landlords by region & currency depreciation discount: 

 

% of homes let by overseas based landlords (2019 YTD)

YoY change in the % of homes let by overseas landlords

Average

Price

Discount from £ depreciation against US$ since 2014

Average stamp duty bill (including 3% surcharge for second homeowners)

London

18%

8%

£       469,640

-£    107,030

 £          27,570

Yorkshire & the Humber

10%

3%

£       162,500

-£      37,030

 £            5,630

South East

13%

7%

£       321,580

-£      73,290

 £          15,730

Scotland

6%

0%

£       151,040

-£      34,420

 £            5,050

South West

9%

4%

£       255,540

-£      58,240

 £          10,440

East of England

14%

8%

£       290,560

-£      66,220

 £          13,240

North West

12%

7%

£       163,700

-£      37,310

 £            5,690

North East

10%

5%

£       128,510

-£      29,290

 £            3,930

West Midlands

5%

1%

£       184,710

-£      42,100

 £            6,740

East Midlands

5%

2%

£       192,760

-£      43,930

 £            7,140

Wales

2%

-2%

£       162,290

-£      36,990

 £            5,610

Great Britain

 11%

4% 

£       232,840

-£      53,065

 £            9,140

Source: Hamptons International

Western Europeans continue to make up the largest group of overseas landlords, with a third - 33% - based there so far this year. But since 2014, North American landlords have increased the most.  

The proportion of homes let by international landlords based in North America has risen to 14% so far this year, 1.9% higher than in 2014.

Landlords based in Eastern Europe, Africa and Oceania also recorded increases.  

Meanwhile the proportion of overseas landlords from the Middle East fell the most since 2014.  Middle Eastern investors made up 9% of all overseas-based landlords in Great Britain, 2.4% fewer than in 2014.

Where overseas landlords are based: 

 

Where overseas landlords live

Change in % since 2014

North America

14%

1.9%

Eastern Europe

2%

1.7%

Africa

8%

1.5%

Oceania

13%

1.2%

Western Europe

33%

-0.2%

Asia

20%

-1.6%

South America

1%

-2.0%

Middle East

9%

-2.4%

Source: Hamptons International

The research also shows that the average rent of a newly let property in Great Britain increased to £999 per calendar (pcm) in October, up 2.2% on the same period last year. 

Rising rents in the South drove rental growth, with average rents increasing by 3.9% in the South East, 3.8% in the East and 3% in the South West.  

London lagged slightly behind, with the average rent rising to £1,763pcm, up 2.8% year-on-year.  

Meanwhile, the north of England was the only region to record falling rents (-0.6%), the first annual fall since May 2018. 

Average Rents of new lets (pcm): 

Region

Oct-19

Oct-18

YoY

Greater London

£       1,763

 £       1,715

2.8%

South West

£          833

 £          809

3.0%

South East

 £       1,090

 £       1,049

3.9%

Scotland

£          680

 £          661

2.9%

Midlands

£          689

 £          687

0.3%

North

£          644

 £          648

-0.6%

East

£       1,002

 £          965

3.8%

Wales

£          697

 £          672

3.7%

Great Britain

£          999

 £          977

2.2%

Source: Hamptons International

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    Not sure why this is a problem as the headline seems to suggest. As long as these rental properties are looked after and well-maintained and tenants kept happy. It's all part of freedom to trade. It's just the other side of UK citizens being able to buy property abroad. Long may these freedoms exist.

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