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London landlords desert capital in search of higher yields

Wednesday 17 May 2017

London BTL investors are looking further afield in a hunt for properties outside the capital, new figures from Countrywide reveal. 

Research from the UK's largest agency's shows that the proportion of London investors buying elsewhere has reached a high of 50 per cent this year, compared to just 19 per cent in 2011. 

In 2016, London landlords purchased over 22,000 homes outside of the capital - a seven-fold increase on the 3,311 recorded in 2010 when Countrywide first began keeping a record.

The agency says that Londoners are increasingly looking north for BTL property, in a bid to benefit from better yields and lower stamp duty costs – which currently stand at an average of £40,000 in the capital, and fall to £6,300 outside of London.

Over a quarter of London investors picked up property in the East (26 per cent), while around 9 per cent of BTL properties purchased in the north are sold to London landlords.

Last month, Countrywide recorded just 12 per cent of London homes were sold to an investor which is close to a record low.

Johnny Morris, Countrywide's research director, said: “In response to slower price growth and government tax hikes, London landlords are looking further than ever to find a return. 

“Lower entry costs and higher yields outside of the capital are enticing investors to look further afield than they have previously.

“Rental growth remains low across Great Britain. Mostly driven by London where rents have fallen for the sixth consecutive month. 

“The repercussions of the stamp duty rush are still playing out in the rental market as stock levels continue to remain high. 

“But with fewer investors buying in the capital we will likely see stock levels fall, driving future rental growth.”

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