Londoners are looking outside the capital to grow their buy-to-let portfolios, with half of all investors living in the capital now buying investment properties outside of it.
This is the highest percentage on record, according to Countrywide Properties.
In 2011, just 19 per cent of London investors bought homes outside of the city, but Countrywide Properties said higher yields and lower stamp duty are making other areas of the country look more attractive.
The east of the UK has the highest proportion of London landlords overall, with more than a quarter of homes sold to investors bought by a London-based landlord.
Interest in the north of the UK from the capital’s landlords is growing at record rates, with nearly 10 per cent of buy-to-let homes bought in the north going to a London landlords, compared to just 1 per cent in 2010.
Johnny Morris, research director of Countrywide, said Londoners are significantly cutting their stamp duty bills by buying outside London.
He said: "Lower entry costs and higher yields outside of the capital are enticing investors to look further afield than they have previously. But with fewer investors buying in the capital we will likely see stock levels fall, driving future rental growth.”
Landlords buying in London face an average £40,400 stamp duty bill compared to £6,300 for an investor buying outside of the capital, Mr Morris added.
David Hollingworth, associate director of communications of mortgage broker London & Country, said that, as well as stamp duty, tighter mortgage criteria on buy-to-let mortgages was one reason why investors were considering areas where prices are lower.
He said: “The north can be better value, but landlords need to consider other costs.
"This is particularly true if they are hands-on landlords normally, as there will be costs in getting someone to manage the property.”
rosie.murray-west@ft.com
