13:51 PM, 11th November 2019, About 4 years ago 1
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% (a record low) during the same period last year. This is the first year-on-year increase since our records began in 2010 when 14% of homes were let by non-UK based landlords.
The increase was mainly driven 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 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 (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.
The depreciation of sterling is one of the main reasons why the proportion of homes let by overseas based landlords has risen, meaning it is now cheaper for international buyers to purchase a home 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.
Western Europeans still made up the largest group of overseas landlords, with one in three (33%) based there so far this year. However, 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.
The average rent of a newly let property in Great Britain rose to £999pcm in October 2019, 2.2% higher than the same period last year. Rising rents in the South drove rental growth – average rents increased 3.9% in the South East, 3.8% in the East and 3.0% in the South West. London lagged slightly behind, with the average rent rising to £1,763 pcm, up 2.8% year-on-year. Meanwhile the North was the only region to record falling rents (-0.6%), the first annual fall since May 2018.
Commenting 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
“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.”