Investors are fleeing from London to other English towns because of the high stamp duty

The average rent for a property in the UK rose by 0.5% to £935 per calendar month in April 2017 , but in some regions, including London, rents began to fall.

According to a fresh report presented an index of Countrywide, is now in the rental market of great Britain exhibited 11% more homes than a year earlier and is likely to entail a slowdown in the market.

It is already clear that the rent on property in London fell by 3.4% over the past six months. Falling rental rates was also recorded in Wales, by 2.5% and in Scotland – 1%. Minor 0.1% drop recorded in the East of England. More and more investors “Buy to let” , seeing falling interest rates in London, prefer to purchase a property anywhere outside the capital. The proportion of investors buying outside of London, has reached 50% in 2017, this is a significant increase compared to 19% in 2011.

Over the past year, investors bought 22296 residential properties outside the capital, which is 3311 more than in 2010 .

A record number of investors is investing now in the Northern part of England, benefiting from a low Stamp duty . High investor interest from London show to the South of England, every fifth purchase is made by the buyer from London. In the North of England every ninth object of the investments bought by the London investors. In London local investors purchased just 12% , which is close to record lows.

The main problem of capital flight from London – high Stamp duty. Average Stamp duty paid now investors in London – £40000, and the average value of Stamp duty paid by the buyers in other regions of the UK – £6300. Compared with the period before the increase of Stamp duty, London investors pay 70% more, and the burden on investors outside of London increased by only 8%.

Rent growth remains low across the UK. Rent in London in General shows a decline for six consecutive months in a row. But, according to the investors in London, we will likely see a reduction in the real estate market of London, the number of housing intended for lease. Consequently, rents will again begin growth.

® Alice Morgan. 16.05.2017 G.

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