Overseas Property Investor Numbers Fall

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The number of UK buy to let property investments let out by investors based overseas has more than halved in the last eight years.

The latest data released by Hamptons International has revealed that the percentage of overseas based landlords letting buy to let properties in the UK fell from 14.4 per cent in 2010 to just 5.8 per cent in the first 11 months of 2018 – the lowest level on record.

Every region in the UK has seen a fall in the proportion of homes let by an overseas landlord since 2010.

The largest drop has been seen in London which has gone from one in four (26 per cent) of homes let in London owned by an overseas based landlord in 2010, to just 10.5 per cent this year. A fall of 15.5 per cent.

In other parts of the UK, the proportion of overseas based landlords has fallen by 10 per cent in the South East since 2010, followed by the North East and East Midlands, both experiencing a drop of 6 per cent.

Outside the capital, Yorkshire & the Humber has the highest proportion of homes let by an overseas based landlord (6.7 per cent), but this region has only seen a 4 per cent fall in overseas based landlords since 2010.

Western Europeans make up the biggest group of overseas based landlords at 34 per cent, followed by Asian (20 per cent) and North American (13 per cent).

However, since 2010 the proportion of Western European based landlords has fallen by 2.1 per cent, compensated for by a pickup in Asian landlords (+2.1 per cent). Middle Eastern based landlords have also risen by 1.4 per cent since 2010 and now account for 11 per cent of overseas based landlords.

Head of Research at Hamptons International, Aneisha Beveridge, said: ‘The proportion of homes let by an overseas based landlord has more than halved since 2010. Sterling’s depreciation since 2016 undoubtedly makes it cheaper for international buyers to purchase property in Great Britain. However, the conversion of pounds back into local currency means additional costs which cut into an overseas landlords’ monthly income. This combined with a harsher tax regime for overseas investors is dissuading some international investors from entering the rental market.

‘Throughout this year rental growth has been sluggish averaging 1.5 per cent and only passing 2.0 per cent on two occasions. Affordability is not just an issue for those looking to buy a home, but impacts tenants paying rent too. And these affordability barriers will continue to keep a cap on rental growth in the future.’

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