The strength of the UK property market is acting as a significant driver of overseas activity as the recovery continues to gather momentum. The number of overseas landlords owning property in the UK eclipsed five-year high figures of 184,000 for March; this represents 19 per cent growth since 2016 according to research by ludlowthompson. This uptick in Buy-To-Let purchasing is underpinned by steady growth in prospective tenant numbers, which rose for the second month consecutively according to ARLA Propertymark.
The data indicates that both prospective tenant numbers have increased, as well as the number of landlords increasing rent, both potent signals inferring the strength of the rental market. Prospective tenants per branch rose to 82 in February, from 81 in January, which is back to pre-pandemic levels from last February and a significant rise relative to 65 in 2019.
With the UK due to lift restrictions on international travel from May 17 industry experts are predicting a rush of foreign investment activity through the spring. Strong rental demand is whetting appetites for BTL property substantiated by strong capital growth prospects across the market. The average UK house price in March reached £232,134, representing 5.7 per cent annual house price growth according to Nationwide’s House Price Index.
The upside potential recognised by buyers correlates with reduced uncertainty given the resolution of Brexit, COVID-19 and election unpredictabilities. Overseas buyers, in particular, have shrugged off the newly instituted 2 per cent stamp duty surcharge in the context of favourable short-term exchange rate fluctuations and long-term investment horizons.
The resilience of a historically strong property market, upwards trending rental demand, the excellent reputation for educational institutions, and global optimism regarding vaccinations is a huge boost to ongoing overseas investment in UK property. With the wider economy, and labour market, expected to perform well over the medium to long term, savvy buyers are acting expeditiously to capitalise on the strength of the market.
The number of tenants experiencing rent increases jumped in February as half (49 per cent) of agents saw landlords increasing rent compared to 39 per cent in January. Year-on-year this figure is also up from 40 per cent in February 2020.