New figures show that typical capital gains for buy to let investors are on the way down.
Hamptons International says that landlords who sold in 2019 had typically owned their property for 9.1 years and sold it for an average £78,100 more than they paid for it.
This equates to a 42 per cent grow gain on their initial investment but it is £2,400 or three per cent less than landlords who sold in 2018.
Overall, 84 per cent of landlords who sold their buy to let property in England and Wales last year made a gross capital gain but 16 per cent made a loss.
Unsurprisingly, Hamptons says that landlords selling up in London made the biggest gains – typically a gross gain of £253,580, over 20 times that of a seller in the North East where the average gain was just £11,710.
The agency calculates that some 150,000 BTL properties were sold by landlords in England and Wales last year.
“The profitability of the buy to let market has been questioned in recent years and is one of the main reasons why some landlords have chosen to sell up. But one of the biggest bonuses from cashing in comes from the capital gain on a property. Over a third of landlords’ total return comes from capital growth rather than rental income in Great Britain” explains Aneisha Beveridge, head of research at Hamptons International.
This post has originally been featured in Letting Agent Today.