Landlords banked £82,000 profit on each rental property sold in 2020

rental yields btl

The typical landlord sold their buy-to-let property for £82,450 more than they paid for it in 2020, resulting in an average value increase of 42%, research from Mistoria Group has revealed.

According to estate agent Hamptons International, landlords benefited from an increase of £3,390 or 4%, compared to the average gain of £79,060 on 2019.

The increase in house prices in the past year has had a significant impact on these figures, with the average cost of a home up around £15,000 according to a number of monthly indexes.

However, the number of buy-to-let properties sold was at a seven-year low, with a total of 131,900 homes sold by landlords in Britain in 2020, the smallest number since 2013.

Landlords who did decide to sell in 2020 had owned their property for just over nine years on average. Those in London made the biggest gains when selling their rental properties, and the top 10 local authorities where landlords made the biggest gains were all in the capital.

The average landlord in the capital sold their buy-to-let for £302,200 or 71% more than they originally paid for it, having owned the property for just under 10 years.

Those selling in Kensington and Chelsea made the biggest gains in 2020, selling homes for £784,980 more than they paid for it them on average. The gain they made was 9.5 times greater than the average in England & Wales.

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 a 16% capital gain, having owned the home for eight years.

Mish Liyanage, managing director of The Mistoria Group, said: “Landlords have benefited from good capital growth across the country and despite Covid-19, are seeing healthy profits. Many have added value to their property portfolio through modifications, extensions, conversions and redevelopment, as a result of increased savings and liquidity.

“The pandemic resulted in the government providing financial support via the job retention scheme (furlough scheme), bounce back loans, council grants, business interruption loans, stamp duty reliefs and interest rate reducing to 0.10%. On top of that, all overseas travelling has come to a halt and entertainment curtailed so many investors have had cash to invest in upgrading their properties.”

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