Foreign Investment in Buy to Let Rental Property Cools
The buy to let market has been dominated by foreign investors for years, but that trend appears to be changing. In recent housing data, foreign investors are shying away from the idea for several reasons. Aside from the uncertainty created by Brexit, fingers are pointing at fundamental points for the retreat. Lower expectations lead the headlines for a change in attitude, but stronger deterrents lead in the list of why buy to let is seeing a change of heart.
Foreign investment in the buy to let market has been strong over the past few years, but changes in the ability for profit within the UK housing market are changing.
First, the expectation for house price growth has changed from strong to possible. House prices within the market have cooled since the end of last year and that trend appears to be continuing, according to many close to the market.
Second, new taxes affecting the buy to let market took hold last summer. Taxes have become tougher on those who own buy to let property.
Third, Brexit concerns have impacted the value of sterling. This change in currency value affects foreign investment and that will likely not be changing anytime soon.
During the last eight years, the number of buy to let holdings outside the UK has reduced by 50%. The rate of buy to let by foreign investment reached the lowest level during the first 11months of 2018 in eight years. London has seen the most impact in the change in buy to let and is by far the biggest rental city market in the country.