Tax changes lead to big fall in overseas-based buy to let investors

The proportion of landlords of British buy to let properties who are themselves based overseas has fallen to a record low according to Countrywide.

Research by the agency group’s high-end brand Hamptons International says in the first half of this year the proportion of international based landlords in Great Britain fell to just six per cent. 

This has more than halved since the first half of 2010, when Countrywide began recording this information and the proportion was 13 per cent. 

Over the last year alone the proportion of homes let by an international landlord has fallen from eight per cent to its current six. 

However, much of the fall appears to have taken place for properties outside of London.

In the capital itself the proportion of homes let by an overseas landlord peaked at 20 per cent in the second half of 2011 but fell back to just seven per cent in H2 2017 – the lowest point on record.  

However, unlike the figure for Britain as a whole, London saw a rise in the proportion of homes let by an overseas landlord between H2 2017 and H1 2018; this now stands at around 12 per cent. 

Some 44 per cent of the overseas landlords with properties to let in Britain are based in western Europe, followed by Australasia on 16 per cent, North America on 14 per cent and Asia on 12 per cent.  

Middle Eastern landlords account for nine per cent. 

“Higher stamp duty and annual tax on enveloped dwellings combined with a steady increase in foreign investors’ tax bills has led to a decline in foreign investment in buy to let. Overseas investors also saw the removal of capital gains tax exemptions in 2015” explains Aneisha Beveridge, analyst at Hamptons International.