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Almost two thirds of London-based landlords decided to put their money into buy-to-let properties outside the capital in the last 12 months, according to estate agent chain Hamptons International.

As many as 59 per cent of London-based landlords decided to invest in buy-to-let properties outside the city, which is a 17 per cent increase in 3 years. This is also a significantly higher proportion of London-based landlords than in 2010, when just 25 per cent of London-based landlords opted to invest in the buy-to-let market outside London.

This comes after the estate agents Property Vision estimated that the average prime London property is at its cheapest valuation since 2010, according to their Prime Central Index.

National Landlord Investment Show – MPU

Stamp duty bills mount

Hamptons International estimated that a landlord purchasing property in London faced a Stamp Duty bill of £24,600 in the last 12 months, but those who invested outside the capital faced a significantly smaller Stamp Duty bill of £5,330.

Stamp Duty bills have been rising for landlords recently, with many feeling the impact of the introduction of the 3 per cent surcharge on additional homes worth over £40,000.

London landlords favour South East

The South East region attracted 11 per cent of London-based landlords to invest in buy-to-let properties there in the last 12 months. Dartford proved to be a popular destination in particular, with 60 per cent of buy-to-let properties here being bought up by London-based landlords in the last year alone.

Across Great Britain, rents rose 1.9 per cent to £969 per month in the year to March, according to Hampton International. Meanwhile, London rents hit a record high in March, rising 3.7 per cent over the past year, to £1,737 per month.

Regulatory burden responsible

Aneisha Beveridge, head of research at Hamptons International, commented: “April marks the 3-year anniversary of the Stamp Duty surcharge introduction on second homeowners. Following the tax hike, landlords have been adapting their strategy to find new ways to make their returns.”

Ms Beveridge explained the shift towards investing outside London, saying: “Lower entry costs and higher yields outside the capital are enticing investors to look further afield than they have previously.”

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Steven Taylor
Steven reports on the daily churn of the property news cycle, often reporting on the stories you may have missed during the week. He covers a range of topics, including market sentiment, new findings and announcements by policy-makers.

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