Number of properties let by overseas landlords rises significantly

13 Nov 2019

To let sign According to recent data from lettings specialists Hamptons International, the number of UK homes let by landlords from overseas has increased significantly. 

As per the figures, the total number has jumped to 11% during the first 10 months of this year, up from a record low of 7% recorded during the same period in 2018. 

This marks the first year-on-year rise since their record-keeping was introduced in 2010, when 14% of houses were let by foreign landlords, said Hamptons International.

The key localities which supported the increase were in the South, with the East part of Britain and London witnessing the largest increase in the proportion of homes being let by non-UK-based landlords. In London and the East, overseas investors hiked by 8% year-on-year. This was followed by the South East and the North East, both boasting a 7% year-on-year surge. 

The highest proportion of homes being let by overseas landlords was London at 18%. This marked a significant increase from the previous 10% recorded during the first 10 months of 2018. Wales had the lowest proportion on the other hand, at -2%, and was also the only region to record a fall from the same period last year. 

The sudden hike in overseas-based landlord letting UK property is widely a result of the depreciation of the Sterling, meaning it is now cheaper for foreign buyers to purchase a house in the Britain compared to recent years. In several cases, the Pound’s devaluation more than compensates for the additional 3% stamp duty surcharge which buyers are subject to pay on second home purchases. 

The majority of overseas landlords is comprised of Western Europeans, with a third (33%) based in the region so far in 2019. Over the past five years, North Americans have seen the biggest surge however, with the proportion of houses let by international landlords based on North America climbing to 14% so far this year, up by 1.9% compared to 2014. The number of overseas landlords based in Eastern Europe, Africa and Oceania also rose. 

Rent on the rise

On average, the cost of rent for a newly let property in the UK increase to £999pcm in October 2019, marking a 2.2% rise from the same period the previous year. Rental growth in Britain was mainly driven by increasing rent prices in the South, with the average cost of rent soaring 3.9% in the East and 3.0% in the South West. 

Head of research at Hamptons International Aneisha Beveridge 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.”