Stamp Duty hikes pushing more London landlords out of their home city

Increasing numbers of landlords who live in London are looking beyond the capital for buy-to-let returns.

Analysis by Hamptons International – based on activity at Countrywide branches – found that 59% of London-based landlords purchased their buy-to-let property outside the capital during the past 12 months.

In contrast, in 2010 just one in four London-based landlords purchased their buy-to-let outside the capital, with 75% investing in London.

However high house prices in London mean that the 3% Stamp Duty surcharge is particularly significant in the capital, and are pushing buy-to-let investors further out.

The proportion of London-based investors purchasing buy-to-lets in their home region has fallen 17% since 2015, the agent said.

The capital is still the most common area, favoured by 41% of London landlords, but 34% now invest in the north and the midlands, which is up 19% on 2015.

Meanwhile, the analysis found the average cost of a new let in Great Britain rose 1.9% annually to £969 per month in March.

This was driven by a 3.7% rise in Greater London to £1,737 per month, the highest level on record.

Scotland was the only region where rents fell, down 0.1% year-on-year.

Aneisha Beveridge, head of research at Hamptons International, said: “April marks the three-year anniversary of the Stamp Duty surcharge introduction for second-home owners.

“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.”

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%

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4 Comments

  1. Will2

    Will the Landlord Bashing Conservative & Labour polices of banning S21 be a step change and will all the old statistics now become  redundant?   The Government proposals to remove S21 could impact like the Rent Act 1977 as the next step to kill the market will be rent control. For those who remember the Rent Act it is looking like deja vu. Perhaps Shelter, Generation Rent and the Government will step in a provide the housing needed? rather than constantly attacking the PRS.

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    1. James Wilson

      Don’t you worry Will, all those minted Baby Boomers who own the nation’s property have nowhere else to go.  They don’t want to sell and crystalise the massive CGT bill that would await them.  They want to pass the property down to their undeserving offspring, just like in Victorian England – which the country more and more resembles.  So there won’t be much contraction in the PRS.  You watch …

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      1. Will2

        Not worried but I am concerned for those who might suffer. No one has dealt with the real issue which is one of supply, particularly of social housing. What has been happening has not addressed the social housing issue.  The social split caused by successive Government polices and self serving policians hungry for power is most destructive to this country. As far as CGT is concerned it has to be paid at some point; sooner or later.  History is helpful in predicting the future.  So yes I will watch…..

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  2. James Wilson

    This is great news.  A very rare example of Government policy actually working.   Now that the playing field is being levelled and some of the unfair tax advantages BTLers had are being removed the market is freeing up for owner / occupiers to get a look in.  And prices are falling too, which is good news for most people, including estate agents as it means that property might actually start trading again!

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