City investors buying property outside of the capital reaches record high.
So far in 2017, 50% of London investors have purchased buy-to-let property outside of the capital, according to Countrywide plc Monthly Lettings Index. This latest figure compares to just 19% in 2011. In 2016, City investors bought over 22,000 homes outside of London, more than the number of homes sold in Manchester and Birmingham combined.
Investors have found they can benefit from higher yields and lower stamp duty costs by purchasing property further North. Stamp duty costs within London total on average £40,400 compared to just £6,300 elsewhere. Within the Midlands, 8% of all investors are from London compared to under 1% in Wales and Scotland. Nearly 1 in 10 homes purchased by an investor were also sold on to a landlord from London.
Rents have also increased outside of London by 0.5% in April 2017, whilst rents within London have dropped for the sixth consecutive month, down 3.4% year on year. The Midlands has seen new let prices increase by 3.7% year on year for April and even occupied property rents rise by 2.2%.
Commenting, on the findings, Johnny Morris, Research Director at Countrywide, 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.”