Market Insight - May/June 2018
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Lettings

Focus Economy Sales Lettings Stat of the Month

 

Landlord profit

Despite slowing house price growth and higher entry costs, investor gains still grew in 2017. Last year, the average landlord who sold their rental property made a gross gain of £86,651, having owned their property for an average of 8.7 years. That’s based on the difference between the price they bought their property for and the price they sold for. House prices have risen in eight out of the last nine years, which has driven investor gains. As a result, the average gain from a landlord is up slightly from £86,302 in 2016.

But there are huge regional variations. Sellers in London gained £253,981 on average in 2017, over four times more than those selling outside the capital. In fact, one in four landlords (28%) who sold their property in London did so for at least twice what they paid for it an average of 8.1 years ago.

With the highest house prices and strongest capital growth over the last nine years, landlords who sold in London and the South East made the biggest gains. Eight of the ten places where landlords made the highest percentage gains were in London. Kensington & Chelsea continues to top the list where landlords made the biggest actual gain, with an average gross capital gain of £696,665.

Despite slower house price growth, the likelihood of making a profit on a buy-to-let property is still strong, and that’s just taking capital gains into account rather than rental income too. 88% of landlords who sold last year made a profit. Landlords in the South East were most likely to make a profit, with 97% making a gain, whereas landlords in the North East were least likely to make a gain.

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