The United Kingdom’s (UK) buy-to-let market is seeing significant growth as more people move to capitalize on the fallout of an increasingly unaffordable home market, and new data indicate that more foreigners are getting in on the action. A report from UHY Hacker Young shows that the number of foreign landlords has swelled 6% in the last 12 months to more than 2 million. UK property has long been held as a safe-haven investment for foreigners, but interest is expanding more now beyond trophy homes into the rental sector. For more on this continue reading the following article from Property Wire.
The number of foreign landlords investing in UK property has now passed the two million mark, according to new research.
The number of overseas landlords renting out property in the UK jumped by 6% in the last 12 months to 2.04 million from 1.93 million in the previous 12 months, according to a report from chartered accountants UHY Hacker Young.
It says that in the last five years the number of foreign landlords has risen by 39%, up from 1.46 million in 2006/2007.
However, the analysis points out that the consistent growth in the number of foreign landlords investing in UK property may come to a halt following the Government’s recently announced plans to charge Capital Gains Tax on the sale of properties owned by foreign investors from April 2015. This could discourage foreign buyers from investing in the UK.
‘The UK economy is one of the world’s most liquid, and UK property is seen globally as a safe haven from the effects of a financial crash or from national governments’ interference in the assets of private individuals. That has driven fierce demand for prime property in London and the South East in particular,’ said Mark Giddens, head of Private Client Services in the firm’s London office.
‘But foreign investment in UK property is not just about the purchase of trophy homes. Increasingly overseas investors are targeting buy to let properties, and in particular their investment in new build properties is funding a much needed boost to the supply of quality homes in the rental market,’ he explained.
The research points out that over the last five years, the tax taken by HMRC from foreign based landlords who have rental properties in the UK has increased by 64% from £230 million in 2006/20 to £379 million last year.
‘While HMRC has already increased its tax take on foreign owned properties in recent years, the Government’s Autumn Statement is looking to ensure that the Exchequer gets an even greater share of the substantial revenue generated by London’s high end property market,’ added Giddens.
The report adds that the incoming measures are also designed to address concerns that a housing bubble is being created by foreign buyers who regard flats and houses, particularly in London and the South East, as a safe investment.
This article was republished with permission from Property Wire.