Strong capital appreciation deters landlords selling up, says agency

Buy to let investors are not cashing out of the private rental sector despite the restrictions and taxes imposed by government.

Hamptons’ latest research shows that in 2020 some 131,900 properties were sold by landlords in Britain, the fewest since 2013.

The average price was £82,450 above the typical purchase price; that’s a profit of 42 per cent having owned the property for 9.1 years on average. 

This equates to the average landlord gross gain increasing by £3,390 or four per cent in 2020 - marking the first annual rise in more than five years according to the agency.

Unsurprisingly, London landlords made the biggest gains.  

The average buy to let sold in the capital last year went for £302,200 or 71 per cent more than they originally paid for it. London landlords owned the property for 9.8 years on average.  

Despite the increase, typically landlords who sold in the capital last year made a smaller gross profit than those who sold in 2016 when they made an average gain of £364,960.  Back then, 2016 marked the high point for landlord profit when many investors, having bought at the bottom of the market following the 2008 financial crash, decided to sell up.

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 per cent capital gain having owned for 8.0 years.  Some 36 per cent of investors in the region sold their buy to let at a loss, compared to just 12 per cent in England & Wales overall.

Meanwhile 17 per cent or 15,540 homes sold in London were previously rented, down from 19 per cent or 18,920 homes in 2020.    

Nearly one in 10 of rental homes sold in Britain last year had been owned by a limited company landlord.