Foreign investors are increasingly dominating Britain’s buy-to-let market, despite higher taxes, tighter rules and rising costs that have driven many domestic landlords to sell up.
New figures from Hamptons show that one in five rental properties bought through companies so far this year have been acquired by buyers from overseas. Indians, Nigerians and Poles top the list of foreign nationals using corporate structures to purchase British rental homes, cementing a trend that has been gathering pace since 2016.
From Greece to Gateshead
Among them is George Katimertzis, a 50-year-old property investor based in Greece who now owns 16 homes in the northeast of England. “I researched places like France and Germany and decided the UK was the best place to invest,” he said. “It has some of the strongest rules of law around property, clear ownership structures, and well-defined landlord and tenant rules. The rental yields are also really good, especially in the northeast.”
Katimertzis made his first UK purchase in 2022 and now earns gross rental yields of around 10 per cent. He buys through a company structure, which brings substantial tax advantages compared with holding properties in his own name.
Tax breaks and company structures
Hamptons estimates that 70–75 per cent of buy-to-let homes are now bought via limited companies. Unlike individual landlords, who can only claim a basic-rate credit on mortgage interest, company structures allow owners to deduct all borrowing costs. They also pay corporation tax at 19–25 per cent instead of income tax rates that rise to 45 per cent.
Those incentives have helped foreign nationals carve out a larger slice of the market. Back in 2016, just 13 per cent of new buy-to-let companies were set up by overseas buyers; today, it is 20 per cent.
Homegrown landlords selling up
The growth in foreign investment contrasts with a wave of domestic landlords exiting the market. Many are buckling under the weight of rising mortgage costs and looming energy-efficiency rules that will require rental properties to achieve at least a C energy rating by 2028. A survey by the National Residential Landlords Association earlier this year found a record 26 per cent of landlords had sold at least one property, compared with only 8 per cent who had bought.
The Chancellor, Rachel Reeves, has added to the squeeze by raising the stamp duty surcharge on buy-to-let and second-home purchases from 3 per cent to 5 per cent. Non-residents face an additional 2 per cent levy on top.
The nationalities most active in Britain’s buy-to-let market reflect recent migration trends. Between 2019 and 2023, the UK recorded sharp increases in arrivals from Nigeria and India — up by 127,000 and 178,000 respectively. Hamptons’ data shows Indians have established 684 buy-to-let companies this year, Nigerians 647, and Poles 473.
Polish investors are often drawn from the country’s large diaspora in Britain. Marcin Struczyk, 42, who moved to the UK in 2008 and runs a major mortgage brokerage for Poles, has himself set up a buy-to-let company and purchased properties in Doncaster. “My generation that came to the UK still has that hunger and determination to push on,” he said. “That is why there is this interest in buy-to-let, because we just don’t have those options in Poland.”
For brokers, the UK’s appeal to foreign landlords is straightforward: high tenant demand, transparent rules and a robust mortgage market. “We have at least 12 applicants for every property, sometimes up to 80,” said Marc von Grundherr of Benham and Reeves estate agents. Average rents in England and Wales have risen 34 per cent in five years, now standing at £1,372 per month.
Yields in regions such as the northeast remain especially attractive, averaging 9.3 per cent at the start of this year, compared with the national average of 7.1 per cent. Jackie Fitzgerald of Homes for Houses, which sources properties for expats, said investors from India and the Middle East were particularly active there. “The region is still one of the most affordable, the yields are strong, and there is capital growth from wider industry investment too,” she said.
Yet some warn that enthusiasm is starting to wane as higher surcharges and regulatory hurdles make the market less enticing. “The last two governments have done everything to turn the UK from being a place that everyone wanted to invest in, to me now having to work incredibly hard to convince people why it is still a good place,” von Grundherr said.
But for investors like Katimertzis, the UK’s appeal endures. “The properties here are affordable, and provide not only high returns but sustainable returns too,” he said. “I am looking for more, but I’m not in a hurry.”
