The average buy-to-let landlord made £80,000 profit upon selling their rental property in 2018, new figures show.
Landlords in London made the most, at an average of ££248,120, which is almost three times as much as those selling outside the capital.
In 2018, 85% of landlords sold their buy-to-let for more than they paid for it, with 15% 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 9.6 years on average, found that the profit made by landlords last year was on average down £3,660, or 4.4%, when compared with the £83,430 average gross gain landlords made in 2017.
London landlords selling up last year made £24,000 less than those who sold in the capital in 2017.
Average landlord gain (before tax)
According to figures published today, the average pre-tax profit earnt by a landlord who sold up fell in five out of 10 regions between 2018 and 2017 as house price growth slowed.
Landlords who sold their buy-to-let in the North East made the smallest average gain of £11,810, £4,270 less than in 2017.
Meanwhile average gains increased between 2017 and 2018 in the South West (£3,460), East Midlands (£2,020), North West (£400), Yorkshire & the Humber (£4,490) and Wales (£5,340).
Landlords selling up in London and the South East were most likely to sell their buy-to-let for more than they paid for it, with 96% of landlords making a profit in 2018. Meanwhile, landlords selling up in the North East were least likely to make a gain, with 56% selling their buy-to-lets at a profit and therefore 44% making a loss.
There were four local authorities in England and Wales where landlords were more likely to sell their buy-to-let for less than they paid for it last year - South Tyneside (49%), Sunderland (48%), Darlington (45%) and Middlesbrough (43%).
With the highest house prices and strongest price growth over the last 10 years, the top 10 local authorities where landlords made the largest gains in 2018 were in London.
Landlords selling in Kensington and Chelsea made the biggest pre-tax profit, averaging £1,072,880, having owned their property for 10.6 years.
South Bucks was the region outside of the capital with the highest average gain of £278,310.
Aneisha Beveridge, head of research at Hamptons International, said: “The average landlord who sold their buy-to-let last year did so for nearly £80,000 more than they paid for it. Over the 9.6 years that the average landlord has owned their buy-to-let, house price growth has driven their gains, with prices having risen around 30% over the period. But given lower expected future house price growth and tighter mortgage regulation, more investors are shifting their focus from capital gains to yields.”
Top 10 local authorities with highest average landlord seller gain (before tax)
Local Authority | Region | Average gain £ | % making a gain | Average ownership |
KENSINGTON AND CHELSEA | London | £ 1,072,880 | 91% | 10.6 |
CITY OF WESTMINSTER | London | £ 557,380 | 91% | 11.1 |
CAMDEN | London | £ 433,560 | 95% | 9.3 |
HAMMERSMITH AND FULHAM | London | £ 432,150 | 96% | 10.1 |
RICHMOND UPON THAMES | London | £ 325,100 | 96% | 10.1 |
WANDSWORTH | London | £ 317,820 | 96% | 10.0 |
ISLINGTON | London | £ 296,300 | 96% | 9.3 |
HACKNEY | London | £ 289,650 | 98% | 8.9 |
HARINGEY | London | £ 278,410 | 95% | 9.3 |
SOUTH BUCKS | South East | £ 278,310 | 98% | 9.3 |
Source: Hamptons International
The data also reveals that rental growth rose to 2.1% in Great Britain, the highest rate since January 2018, as the cost of a new let increased to £972 pcm.
Rents rose in every region across Great Britain, led by gains in London which had the highest rental growth with average rents rising 3.9% year-on-year, followed by the South West (1.8%) and the Midlands (1.6%).
Beveridge added: “Rental growth accelerated to 2.1% in Great Britain last month, the highest level since January 2018. This was driven by a 3.9% year-on-year increase in London rents.”
New lets (pcm)
| Apr-19 | Apr-18 | YoY |
Greater London | £ 1,738 | £ 1,672 | 3.9% |
Inner London | £ 2,663 | £ 2,596 | 2.6% |
Outer London | £ 1,563 | £ 1,497 | 4.4% |
South East | £ 1,039 | £ 1,033 | 0.6% |
South West | £ 801 | £ 786 | 1.8% |
East | £ 954 | £ 946 | 0.9% |
Midlands | £ 682 | £ 671 | 1.6% |
North | £ 628 | £ 621 | 1.1% |
Wales | £ 660 | £ 655 | 0.8% |
Scotland | £ 631 | £ 628 | 0.3% |
Great Britain | £ 972 | £ 952 | 2.1% |
Source: Hamptons International
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