The proportion of overseas based landlords in Great Britain hit a record low in 2017 as measures to curb the practice took hold.
Overseas landlords own 5 per cent of all British homes let in 2017, according to the latest research from estate agent Countrywide.
This is down substantially from 12 per cent in 2010.
Countrywide's monthly letting index showed London has seen the largest fall with one in ten (11 per cent) homes let this year owned by an overseas landlord, down from one in four (26 per cent) in 2010.
In prime central London overseas based landlords owned nearly a third of all homes (31 per cent) let in 2010, a figure which has fallen to 23 per cent in 2017.
The number of European based landlords has been gradually falling over time, more so than any other nationality.
In 2010 they made up 39 per cent of all overseas landlords in London, but now account for 28 per cent.
They were the biggest group of overseas investors in London until 2014. Asia based landlords are now the biggest group of all overseas based landlords in the capital (33 per cent), followed by Europeans (28 per cent), North Americans (10 per cent) and Middle Eastern (9 per cent).
Outside of London, Europeans (37 per cent) remain the biggest group of overseas landlords.
The proportion of overseas based landlords has fallen in every region across Great Britain since 2010.
London has always had the highest proportion (currently 11 per per cent) of landlords based overseas, followed by the South East (5 per cent).
Outside London and the South East, less than 5 per cent of homes are let by an overseas landlord. Scotland, Wales and the Midlands have the lowest (3 per cent).
The average price of a new let in Great Britain rose by 1.1 per cent year-on-year in June 2017 to stand at £950 per month.
London was the only region to see rents fall year-on-year (-0.8 per cent). The South West recorded the strongest rental growth of 4.6 per cent, the biggest year-on-year pickup since November 2015.
Commenting on the findings, Johnny Morris, research director at Countrywide, said: “The growth of the private rented sector since 2010 has not been driven by overseas investors.
"A steady increase in foreign investors’ tax bills combined with more recent falling expectations of price growth in London has led to a decline in foreign investment in buy-to-let.
“As well as having to contend with increased stamp duty and the annual tax on enveloped dwellings (ATED), overseas investors also saw the removal of capital gains tax exemptions in 2015."
Steve Carlson of Cardiff based Carlson Wealth Management said: "It’s hard to know whether the fall in overseas investors is due to the myriad of tax changes effecting landlords and overseas investors, or whether it is due to falling rental yields and the ratio of average house price to average earnings being at an all time high indicating that UK property may be overpriced."