A large part of being a landlord is working out the best time to sell to earn the optimum amount of capital appreciation on top of the rental income which comes in from tenants.
​The latest research from Hampton’s International shows that this might be one of those good times for sales. Findings from the company shows that 85% of landlords in the Private Rented Sector (PRS) sold their property for a profit in 2018, and that those people made an average gross gain of £79,770.
As always, these figures vary by region; landlords in London who sold buy to let property last year made an average gross gain of 248,120 – more than three times the national figure – though that can be put down to higher property prices. The latest figures from Rightmove show that the average London price is £616,643 as of May 2019, just over triple the national average.
Other regions where the average gain increased over last year include the North West, South West, the South East, East Midlands, Wales and Yorkshire and the Humber.
Aneisha Beveridge, head of research at Hamptons International, said: ‘The average landlord who sold their buy to let last year did so for nearly £80,000 more than they paid for it. Over the 9.6 years that the average landlord has owned their buy to let, house price growth has driven their gains, with prices having risen around 30% over the period.
She added: ‘But given lower expected future house price growth and tighter mortgage regulation, more investors are shifting their focus from capital gains to yields.’
The report also notes that UK rents increased by 2.1% in the 12 months to April 2019 which was the highest year-on-year increase since January 2018. This has taken the average cost of renting to £972 a month. Similarly to the situation with house prices, rents grew in almost every region with the largest gains coming in London.
Therefore, whilst many landlords sold their properties in 2018 it is clear that the future remains bright for those who did not. The potential capital gains on offer are impressive, but rising rents and a continually growing tenant pool mean that landlords who prefer longer-term yields still have plenty to be happy about.
Are you looking to sell a tenanted buy to let property? Get your free valuation from yieldit today and find out what makes selling with us the smart choice!
