The average buy-to-let landlord who sold their investment property in 2017 made £86,651 on the amount they paid for it, having owned the rental home for a typical period of 8.7 years, new data from Countrywide shows.
Although the average gain made by landlords is impressive, it is not as high as that made by a typical homeowner, who made £92,886 on a property sale last year. However, this higher figure reflects the fact that, on average, homeowners lived in their property for a slightly longer term of nine years.
Unsurprisingly, London landlords who sold up last year made the greatest profit, at an average of £253,981, which is over four times more than a typical landlord selling outside of the capital.
Eight of the ten locations where landlords made the highest percentage gains were in London, with Maldon in Essex (118%) and Pendle in Lancashire (109%) being the only exceptions.
Landlords in the North East made the smallest gains – £23,874 – over ten times less than a landlord in London.
Investors selling in Selby in North Yorkshire made the lowest percentage profit, at an average of 14%, but still made £9,703.
Johnny Morris, the Research Director at Countrywide, comments: “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.
“Even in areas where price growth has lagged behind, most landlords have made a profit from rising prices.”
The Countrywide report also reveals its latest rent price figures, for January. The figures show that rents in London grew faster than any other region for the third consecutive month, to stand at an average of £1,686 per month – 3.1% higher than last year’s level.
Scotland was the only region to see rents drop.
Morris adds: “Rents continued to grow in January. 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.”