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Landlords who sold up last year made an average £78,100 profit

The average buy-to-let landlord made £78,100 profit upon selling their rental property in 2019, fresh data shows.

Landlords selling up in London made the biggest gains. The average London landlord made a gross gain of £253,580, which is more than 20 times that of a seller in the North East where the average gain was £11,710 in 2019. 

In 2019, 84% of landlords sold their buy-to-let for more than they paid for it, with 16% making a loss, according to the research by Hamptons International, part of Countrywide, which analysed data covering England and Wales.

However, the research, which shows that the average landlord selling up had owned their property for 9.1 years on average, found that the profit made by landlords last year was on average down £2,400, or 3%, when compared with the average gross gain landlords made a year earlier. However, this still equates to a 42% gross gain on their initial investment. 

The average gross gain made by a landlord when selling up in 2019 fell for the second consecutive year, reaching the lowest level since 2015. 

In 2018, the average landlord sold their home for £80,500 more than they paid for it, £2,400, or 3% more than in 2019. This is mainly because landlords who sold up in 2018 generally bought in 2009, the bottom of the market. 

Residential property prices rose 46% between 2009 and 2018, whereas prices rose 38% between 2010 and 2019. 

Landlords average gross capital gain by region

Region

Average ownership (years)

Average gross gain

% making a gain

YoY change in gross gain £

YoY change in gross gain %

London

9.0

£     253,580

97%

-£      6,110

-2.4%

South East

8.7

£     104,930

96%

-£      2,760

-2.6%

East

8.7

£       82,910

94%

-£      2,340

-2.7%

South West

8.7

£       55,900

89%

-£      1,840

-3.2%

West Midlands

9.2

£       36,150

82%

-£      1,660

-4.4%

East Midlands

9.0

£       34,790

84%

-£      1,090

-3.0%

Wales

9.4

£       28,300

74%

-£          270

-0.9%

North West

9.5

£       27,000

71%

-£      1,330

-4.7%

Yorks & the Humber

9.6

£       23,860

71%

-£      1,350

-5.4%

North East

9.2

£       11,710

55%

-£      1,210

-9.4%

England & Wales

9.1

£       78,100

84%

-£      2,400

-3.0%

             

Source: Hamptons International & Land Registry      

Landlords selling up in London were most likely to sell their buy-to-let for more than they paid for it, with 97% of landlords making a profit in 2019.  

Top 15 local authorities with biggest gross capital gains

Local Authority

Average ownership (years)

Average gross gain

% who made a profit

Kensington and Chelsea

9.5

£       924,010

94%

City of Westminster 

9.7

£       605,390

93%

Camden

8.6

£       458,800

95%

Hammersmith and Fulham

9.4

£       446,990

95%

Richmond upon Thames

9.2

£       333,990

97%

Wandsworth

9.2

£       325,980

97%

Islington

9.1

£       313,500

98%

Haringey

8.5

£       294,290

96%

Elmbridge

9.1

£       285,070

96%

Hackney

8.3

£       278,910

98%

Lambeth

8.4

£       277,600

96%

Merton

8.4

£       275,490

96%

Ealing

9.2

£       250,320

98%

Brent

8.9

£       249,330

97%

Barnet

8.9

£       247,600

97%

Source: Hamptons International & Land Registry          

BTL landlords selling up in the North East were least likely to make a gain, with 55% selling their buy-to-lets at a profit, while 45% made a loss.

Aneisha Beveridge, head of research at Hamptons International, said: “The profitability of the buy-to-let market has been questioned in recent years and is one of the main reasons why some landlords have chosen to sell up.  But one of the biggest bonuses from cashing in comes from the capital gain on a property.

"Over a third of landlords’ total return comes from capital growth rather than rental income in Great Britain. 

“Landlords in the south, where house prices are higher and historic price growth has been stronger, saw the greatest capital gains last year.  In fact, the average London landlord gain was over 20 times that of a seller in the North East where landlords are more reliant on rental income. 

"But with house price growth expected to stay lower than in the past, more landlords are having to switch their focus to maximise rental income, rather than rely on capital growth.”

Poll: Are you currently thinking about selling a rental property?

PLACE YOUR VOTE BELOW

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    Don't forget they'll be paying 28% CGT whereas someone investing in the stock markets could have made about £150,000 capital gains tax free along with about £80,000 dividends tax free during the same period.

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    And there will have been expenses as well for selling up - mortgages (if still mortgaged), solicitors, estate agents, searches/surveys possibly, and whatever else is involved with the sale of a property. This all comes off the gross before the net gain (or loss) is actually achieved

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