Landlords selling up made £79,770 average gross gain in 2018
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Yet landlords selling in London made an average gross gain of nearly £250k

  • The average landlord in England and Wales sold their buy-to-let in 2018 for £79,770 more than they paid for it (before tax), having owned the property for 9.6 years on average.
  • In 2018, 85% of landlords sold their buy-to-let for more than they paid for it, with 15% making a loss.
  • Landlords selling up in London made a £248,120 average gross gain last year, 3.1 times more than the average gain in England and Wales.
  • 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.

The average landlord who sold their buy-to-let in England and Wales last year did so for £79,770 more than they paid for it (before tax – i.e gross), having owned the property for 9.6 years on average (table 1). This is £3,660 (-4.4%) less than the £83,430 average gross gain landlords made in 2017. In 2018, 85% of landlords sold their buy-to-let for more than they paid for it, with 15% making a loss (table 1).
Landlords who sold up in London last year made the biggest gain at £248,120 having owned their property for 9.6 years. This was 3.1 times more than the average landlord in England and Wales. Yet London landlords selling up last year made £24,000 less than those who sold in the capital in 2017 (table 1).

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 (table 1). 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 (table 1).

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 (table 2). South Bucks was the region outside of the capital with the highest average gain of £278,310.

Rental Growth

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 (table 3). Rents rose in every region across Great Britain. London 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%) (table 3).

Commenting 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.
“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.”

 

Please note the Hamptons International Monthly Lettings Index for May will be released on Friday 14 June 2019, embargoed for 00.01 hours Monday 17 June 2019.

Chart 1 - Average landlord gain (before tax)

 

 Source: Hamptons International 

 

Table 1 - Average landlord gain (before tax)

 Source: Hamptons International 

 

Table 2 - Top 10 local authorities with highest average landlord seller gain (before tax)

Source: Hamptons International

 

Table 3 - New lets (pcm)

Source: Hamptons International

 

For further information please contact: 

Alison Blease 

Head of Research PR, Hamptons International 

Tel: +44 (0) 776 96 77 825 

Email: bleasea@hamptons-int.com 

 

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