The top 10 local authorities where landlords made the biggest gains were all in London. Kensington and Chelsea topped the list. Last year the average Kensington & Chelsea landlord sold their buy-to-let for £784,980 more than they paid for it 10.6 years earlier. The gain they made was 9.5 times greater than the average in England & Wales. Camden, the City of Westminster and Hammersmith & Fulham ranked second and third on the list, with the average landlord gain exceeding £500k.
Landlords in the North East continued to make the smallest gains. The average landlord who sold up in the North East made £11,310 or 16% capital gain having owned for 8.0 years. 36% of investors in the region sold their buy-to-let at a loss, compared to just 12% in England & Wales overall.
This means that 37% of investors who sold in the North East last year would have paid capital gains tax (CGT) due to the sum being covered by their £12,300 annual allowance. Across England & Wales, 77% of landlords would have paid CGT on their profit. London landlords, who made the biggest gains, are most likely to have a tax bill to pay with 91% of investors making a gross gain surpassing the annual CGT allowance. Investors can offset costs such as stamp duty and renovation expenses from their capital gains tax bill.
The North East also had the highest share of landlords selling up. Last year 24% of homes sold in the region were sold by a landlord. This equates to around 9,730 homes. Meanwhile 17% or 15,540 homes sold in London were previously rented, down from 19% or 18,920 homes in 2020.
Landlords who have been in the game for the longest period of time have reaped the largest rewards. The average landlord who owned their buy-to-let for more than 15 years made more than three times more than a landlord who had owned their property for less than five years. Many of whom would have renovated and invested further in their property to add value.