Overseas landlords are driven from UK by tax changes

Here’s why

The proportion of foreign buy-to-let investors owning property in the UK has fallen to a new low according to the country’s largest estate and lettings agent.

The decline is most evident in London where ownership of property by overseas landlords has fallen from 26 per cent in 2010 to just 11 per cent; analysis from Countrywide shows.

It also shows that just 5 per cent of British homes are now owned by foreign landlords compared to 12 per cent in 2010.

The number of Europeans landlords owning property in London has seen the biggest fall. In 2010 they made up largest group of foreign investors in London with 39 per cent compared to just 28 per cent this year.

Asia based landlords now take the top spot and make up the largest group owning buy-to-let property in London with 33 percent, followed by Europeans, North Americans (10 per cent) and those from the Middle East (9 per cent).

Tax changes that have increased the amount overseas investors have to pay have been blamed for the drop, including capital gains tax payable in Britain, higher stamp duty rates and annual taxes that overseas company’s owning properties in UK have to pay.

Johnny Morris, research director at Countrywide, said: “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 ATED, overseas investors also saw the removal of capital gains tax exemptions in 2015.”