New data from PayProp, a leading rental payment and client accounting platform, reveals that a significant portion of UK rental income is being remitted to overseas landlords, highlighting a major opportunity for UK estate and letting agents. Over the past three months, 17.1% of overseas rental payments have been sent to Singapore, 16.2% to Switzerland, and 15% to Hong Kong, according to the platform’s findings.
Rising overseas investment in UK property
The growing trend of overseas landlords collecting rental income from UK tenants presents an increasingly important market for UK estate agents. With millions of pounds flowing out of the country to international property investors, UK agents who are prepared to cater to these foreign landlords stand to benefit.
High rental yields in the UK, combined with stagnant property prices, make it an appealing market for international investors. As some domestic landlords choose to exit the market due to rising costs and changing regulations, overseas investment is becoming even more crucial to the UK lettings industry. Data from property comparison site Numbeo shows that the UK currently offers higher average rental yields than Singapore, Switzerland, or Hong Kong, further enhancing its appeal to foreign landlords.
In addition to higher rental returns, overseas landlords are subject to a different tax regime than their UK-based counterparts. According to UK Property Accountants, non-residential landlords are taxed at the basic rate for individuals, while companies and trusts are charged between 19% and 25%.
Compliance challenges for overseas landlords
While the UK market offers lucrative opportunities, the complexity of regulations can be a challenge for overseas landlords. The non-resident landlord scheme, tax obligations, and compliance with UK rental laws can be difficult to navigate. Neil Cobbold, Commercial Director at Reapit | PayProp, explained the importance of professional support: “Overseas landlords represent an important segment of the UK rental market. For overseas landlords, engaging a letting agent’s fully managed service is not just a convenience but an important insurance policy.”
Cobbold continued, “Having a team of UK-based property experts to help them navigate international payments, tax issues, right-to-rent checks, anti-money laundering laws, and other regulations is essential. That key relationship helps ensure compliance with UK law, protects their investment, and avoids costly legal pitfalls.”
PropTech solutions for seamless property management
Technology is playing a key role in helping agents manage overseas landlords. Platforms like Reapit streamline compliance checks and offer seamless international payment processing. PayProp, for instance, allows agents to handle the complexities of international rental payments efficiently. “Adding the investor’s overseas bank details to the platform, reconciling the rent, deducting any tax due, and paying the balance into the overseas account is a simple straight-through process that can be done in a few clicks,” explained Cobbold.
This ease of management, combined with powerful PropTech solutions, is making it easier for agents to meet the needs of overseas landlords while reducing the administrative burden. “Our suite of powerful PropTech delivers for agents keen to engage this important part of the market,” added Cobbold. “Being able to do all of this within the Reapit environment saves a significant amount of time for agents and helps reduce the compliance burden.”
Call for equal taxation
As overseas landlords play an increasing role in the UK property market, there are growing calls for the government to reconsider the tax regime for foreign investors. Cobbold suggested, “The current tax regime for overseas landlords could lead to them paying less tax on rental income than an equivalent UK landlord, and it is time for the government to consider equalising these rates. This would help encourage domestic investment to complement the interest from overseas.”
With the UK property market continuing to attract international investors, the future looks bright for letting agents willing to adapt to these new trends. “For letting agents, there is a significant opportunity to tap into the demand from overseas, providing tailored services that not only meet the needs of international landlords and aid compliance, but also boost their own business growth,” Cobbold concluded.
