London landlords fed up with the capital’s high taxes and property prices are increasingly investing their money in other parts of the U.K.
Nearly 60 percent of London-based landlords bought properties elsewhere in Britain in the last year, up from 25 percent in 2010, according to broker Hamptons International. The trend has sent money rushing into the north of England and the Midlands, a region that includes such major cities as Birmingham.
The shift has been driven in part by a tax paid by buyers of residential property that averaged 24,600 pounds (just over $32,000) in London in the last year, compared with 5,330 pounds outside the capital, according to Hamptons. That bill has increased since changes were made in 2016 to the so-called stamp duty land tax, adding a surcharge for buyers of second homes that affected both individuals and corporate investors.
“Following the tax hike, landlords have been adapting their strategy to find new ways to make their returns,” Aneisha Beveridge, head of research at Hamptons, said in a statement on Monday. “Lower entry costs and higher yields outside of the capital are enticing investors to look further afield than they have previously.”
The cost of renting a home in London rose by 3.7 percent in March to a record 1,737 pounds per month, according to Hamptons. That’s 2.3 times higher than outside the capital, the broker said.