Proportion of private rental homes let by overseas investors increases

The proportion of homes in the private rental sector being let by overseas landlords has increased year-on-year as falls in the value of sterling attract international property investors, according to an index.

Some 11% of private rental homes across Britain were let by overseas-based landlords in the first 10 months of 2019, Hamptons International estimated.

This was up from 7% during the same period last year.

Hamptons said the the East of England, London, the South East and the North West of England saw particularly big increases in the proportion of homes let by non-UK based investors.

London has the highest proportion of homes let by overseas-based landlords, at 18%, while Wales has the lowest, at 2%. In Scotland, 6% of homes are let by overseas-based landlords.

The projections for the whole of Britain are based on homes which have been let by Hamptons’ parent group Countrywide.

The year-on-year increase across Britain in properties being let by landlords based overseas was the first since the index started in 2010, when an estimated 14% of homes were let by non-UK based landlords.

The index said it has become cheaper for international buyers to snap up homes in Britain than a few years ago due to the depreciation of sterling against other currencies.

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

According to calculations in the report, the average home in Britain costs around £53,065 or 23% less than it did in 2014 for a buyer who normally uses the US dollar – solely due to falls 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 typically compared with 2014, the index said.

One in seven (14%) of overseas-based private landlords live in North America, while around a third (33%) are based in Western Europe, according to the research.

Meanwhile, the cost of renting for tenants is on the increase.

The average newly let property was rented out for £999 per month in October – a 2.2% increase on a year ago.

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.

“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.”

Here are the percentages of private rental homes being let by overseas-based investors, according to Hamptons International:

– London, 18%
– Yorkshire and the Humber, 10%
– South East , 13%
– Scotland, 6%
– South West, 9%
– East of England, 14%
– North West, 12%
– North East, 10%
– West Midlands, 5%
– East Midlands, 5%
– Wales, 2%