Monday 15th April 2019


Growing number of BTL landlords shun London’s property market after tax hikes

There has been a sharp decline in the number of buy-to-let landlords investing in the capital’s property market since the 3% stamp duty surcharge was introduced three years ago, new figures show.

Even London-based investors, which historically bought their investment properties near where they lived, are now deterred from buying property in the city, with fresh data from Hamptons International, part of Countrywide, revealing that 59% of London-based landlords acquired their buy-to-let properties outside the capital during the last 12 months, up from 25% in 2010.

High property price growth and a clampdown on landlord taxation has left more London-based landlords will little alternative but to invest further afield in search of higher yields and lower stamp duty bills. 

The proportion of London-based investors purchasing buy-to-lets in their home region has fallen 17% since 2015 (before the stamp duty surcharge on second home purchases was introduced in April 2016).

The research shows that 34% of London-based investors bought buy-to-lets in the Midlands and North during the last 12 months, up from just 14% in 2015 and 4% in 2010.

But the South East remains the most popular destination for London-based landlords purchasing buy-to-lets outside the capital. 

Some 11% of London-based landlords purchased their buy-to-lets in the South East over the last 12 months, 2% fewer than in 2015.

Where London landlords purchase buy-to-lets (last 12 months). 

Region

Where London-based landlords purchase buy to lets

Change since 2010

Change since 2015

London

41%

-34%

-17%

South East

11%

5%

-2%

East Midlands

10%

8%

6%

East

10%

-1%

-2%

North West

9%

9%

1%

Yorkshire and the Humber

6%

6%

6%

West Midlands

6%

5%

2%

South West

3%

-1%

1%

North East

2%

2%

1%

Scotland

1%

1%

1%

Wales

<1%

0%

0%

 

 

 

 

North and Midlands

34%

30%

19%

Source: Hamptons International           

 

Dartford is the most popular destination for London-based landlords in the South East.  Landlords living in London bought 60% of buy-to-lets in Dartford during the last 12 months.

Most popular local authority in each region where London-based landlords purchase their buy-to-lets (last 12 months)

Region

The most popular destination for London-based landlords

% of buy-to-lets bought by a London-based landlord

East Midlands

Lincoln

25%

East

Thurrock

76%

London

Bromley

99%

North East

Middlesbrough

28%

North West

Liverpool

24%

South East

Dartford

60%

South West

Swindon

13%

Wales

Cardiff

4%

West Midlands

Newcastle-under-Lyme

20%

Yorkshire and the Humber

Doncaster

30%

Scotland

City of Glasgow

5%

Source: Hamptons International

Aneisha Beveridge, head of research at Hamptons International, said: “April marks the three year anniversary of the stamp duty surcharge introduction for second homeowners. 

“Following the tax hike, landlords have been adapting their strategy to find new ways to make their returns.  Lower entry costs and higher yields outside of the capital are enticing investors to look further afield than they have previously.”


Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!