Average landlord who sold in 2017 gained £86,651

  • The average landlord who sold their rental property in 2017 did so for £86,651 more than they paid for it, having owned the home for an average of 8.7 years
  • London landlords who sold in 2017 gained an average £253,981 – over four times more than the average landlord selling outside the capital
  • The average owner occupier selling in 2017 made a bigger gain (£92,886) than a landlord (£86,651) as they owned their property for longer
  • Rental growth slowed to 2.1% in February down from 2.4% in January, but was supported by increasing rents in London

 

The average landlord who sold their rental property in 2017 made a gain of £86,651 (table 1), having owned their home for an average of 8.7 years.  The average gain from a landlord is up slightly from £86,302 in 2016.  Sellers in London gained £253,981 (table 1) on average in 2017, over four times more than those selling outside the capital.  In fact, one in four landlords (28%) who sold their home in London did so for at least twice what they paid for it an average of 8.1 years ago (table 1).

Landlord gains are slightly behind owner occupiers, who on average made £92,886 when selling their home in 2017. The average owner occupier made 7% more than a landlord when selling their home last year. This is because the average landlord selling their property in 2017 owned it for 8.7 years, rather than nine years for an owner occupier.

With the highest house prices and strongest capital growth over the last nine years, landlords who sold in London and the South East generally made the biggest gains.  Eight of the ten places where landlords made the highest percentage gains were in London, with Maldon in Essex (118%) and Pendle in Lancashire (109%) being the only exceptions (table 2).

Landlords in the North East made the smallest gains, £23,874, over 10 times less than a landlord in the capital (table 1).  Landlords selling in Selby in North Yorkshire made the lowest percentage profit of 14%, but still made £9,703 on average.

The average cost of a new let rose to £954 pcm in Great Britain in February 2018.  But the rate of  annual rental growth slowed to 1.5%, down from 2.4% the previous month.  Rents in London grew-faster than any other region for the third month in a row to stand at £1,686, 3.1% above last year’s level.  Scotland was the only region to see rents fall in February.

 

Commenting Johnny Morris, Research Director at Countrywide, said:

“House price growth has driven investor gains.  Landlords selling in 2017 owned their homes for nearly nine years.  In 8 of those last 9 years house prices have risen.  Even in areas where price growth has lagged behind most landlords have made a profit from rising prices.

 “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.”

 

Table 1 – Average 2017 landlord seller gain

Average profit (purchase price – sale price) Proportion of sellers making a profit Proportion of sellers doubling their money
London  £            253,981 96% 28%
South East  £            108,073 97% 15%
East  £              84,265 94% 13%
South West  £              57,249 91% 11%
West Midlands  £              40,381 85% 11%
East Midlands  £              38,776 87% 12%
North West  £              34,519 80% 12%
Yorkshire and the Humber  £              32,671 78% 11%
Wales  £              30,938 79% 13%
North East  £              23,874 75% 9%
England & Wales     £              86,651 88% 14%

Source: Countrywide

 

Table 2 – Top 10 local authorities where landlords selling made the biggest profit (%)

Local Authority Average profit (%) Average profit (£)
Brent 135% £            278,795
Waltham Forest 120% £            192,840
Maldon 118% £            102,466
City of Westminster 118% £            494,892
Haringey 116% £            292,017
Lambeth 112% £            263,112
Pendle 109% £              19,525
Islington 106% £            365,943
Kensington & Chelsea 103% £            696,665
Southwark 103% £            258,760

Source: Countrywide

 

Table 3 – New Lets (pcm)

Feb-18 Feb-17 YoY
Greater London  £      1,686  £      1,635 3.1%
South East  £      1,039  £      1,022 1.7%
South West  £         786  £         765 2.6%
East  £         926  £         925 0.2%
Midlands  £         669  £         651 2.8%
North  £         623  £         619 0.7%
Scotland  £         587  £         612 -4.1%
Wales  £         651  £         646 0.8%
Great Britain  £         954  £         935 2.1%

Source: Countrywide