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Buy-to-let landlords made over £86,000 profit after selling up last year

landlord sold

UK landlords who decided to offload a rental property last year stood to gain an average of £86,651 profit from the sale, although there were massive regional variations across the country…

The latest figures from Countrywide revealed that almost all buy-to-let landlords who sold up during 2017 made hefty gains through the capital appreciation of their properties, although it was slightly less than the returns made by owner-occupiers, who reaped £92,886 on average.

This is based on the average landlord owning a property for eight and a half years, while owner-occupiers generally moved on after nine years, leaving slightly more time for a price rise.

However, regional variations were significant, with London landlords standing to make a colossal profit of £253,981 if they sold a rental property last year, more than four times the national average. Out of these sellers, 28% doubled their money, thanks to the property price boom seen in the capital over the past decade. As the market in the capital continues to flatten out, investors may begin to sell their London rental properties in favour of seeking more profit in up-and-coming parts of the country.

Investor gains

The smallest profits were seen in the north-east of the country, where buy-to-let landlords made an average £23,874 on the sale of their rental digs, with 25% of those who sold not making any profit at all, while 9% doubled their money.

In the north-west, which has seen a strengthening property market in recent years and is forecast to continue gaining strength, landlords who sold up last year made average profits of £24,519, with 80% of sellers turning a profit and 12% seeing their original investment doubled on sale.

Johnny Morris, research director at Countrywide, said: “House price growth has driven investor gains. Landlords selling in 2017 owned their homes for nearly nine years. In eight of those last nine years house prices have risen.

“London continues to see the greatest falls in the stock of available homes to rent – on the back of reduced investor activity, this scarcity of supply is driving rental growth.”

With around 4.5 million people now living in privately rented accommodation across the country – a figure which many believe is set to rise further as more people join ‘Generation Rent‘ – the landscape for landlords is set to change, with the Intermediary Mortgage Lenders Association (IMLA) warning that the recent government crackdowns on landlords will only serve to force rents upwards for tenants in the future.

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Source: BuyAssociation

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