A change in the attitude of foreign investors in the UK property market has meant that there are now far more overseas landlords than ever before, according to a new report published by UHY Hacker Young. It said that fewer are now looking for trophy homes in London and the south-east, now preferring to purchase rental homes in regional areas as a way to find decent returns, boosting supply in the private rented sector.
According to the report, the volume of foreign landlords saw a six per cent increase over the course of 2013 to hit 2.04 million, up from the 1.93 million the year before. In addition to this, it marked a 39 per cent rise from the 1.46 million overseas landlords in the UK since 2006/2007.
"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," said Mark Giddens, head of Private Client Services in the firm's London office. He added that the moving away from purchasing trophy homes and towards buy-to-let properties was facilitating a sharp rise in the number of newly built homes in the private rental sector to help cope with demand.
And it also has an impact on the GDP of the nation as well, the study discovered. It said that the tax brought in by HM Revenue and Customs (HMRC) in the past year has risen by almost two-thirds. In 2006/2007, this amounted to some GBP 230 million, but it has risen by 64 per cent to hit GBP 379 million as of the end of 2013.
The country has long been a fantastic place for overseas investors to buy, and Mr Giddens said this is driven by the strength of the market, something the government is looking to capitalise on. "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," he explained.
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- Thursday 23 January 2014