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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%

By MARC SHOFFMAN

Source: Property Industry Eye