Overseas property owners quitting the UK

Overseas property owners in the UK are leaving the country in their droves according to new figures.

The latest data from Countrywide, the UK’s largest letting agency, reveals that the number of foreigners who own a buy-to-let property in the UK has fallen to a new low. Just 5 per cent of properties in the UK have foreign owners, compared to 12 per cent in 2010.

The fall is particularly evident in London, where the proportion of overseas landlords has fallen from 26 per cent to 11 per cent in the same period.

While last year’s fall in the value of Sterling following the Brexit vote did entice some overseas property buyers to enter the market, many existing owners have been selling up in recent years following tax increases on foreign owned property.

“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,” said Johnny Morris, research director at Countrywide. “As well as having to contend with increased stamp duty and Annual Tax on Enveloped Dwellings (ATED), overseas investors also saw the removal of capital gains tax exemptions in 2015,” he added.

Investors who already own a property have had to pay a 3 per cent surcharge on Stamp Duty since April 2016. Meanwhile, since April 2012, companies buying property in the UK have also been liable for the ATED. This amounts to £3,500 a year for properties worth between £500,000 and £1m, or £7,050 for those worth over £2m.

The reduction of foreign owners In London, Countrywide says, is in part due to Europeans withdrawing from the London buy-to-let market. Asians now make up the largest proportion of foreign landlords in the capital at a third, followed by Europeans (28 per cent) and Middle Easterns (9 per cent).

But outside London Europeans are the largest group of foreign landlords, accounting for 37 per cent of overseas property owners.

Article published 17th July 2017