Property investor gains down 10% year-on-year

Landlords who sold buy-to-let properties this year made 10.1% less than last year, research from Hamptons shows.

Investors who opted to sell made £94,800 in capital gains, down from £105,300.

The gap is biggest in the North East, where they made just £22,000 this year, 15.7% less than the 26,400 they made last year.

Aneisha Beveridge, head of research at Hamptons, said: “As house prices start to slip back, there are signs that the landlords looking to sell today may have missed the top of the market. Rather, some investors are consoling themselves with record-breaking rental growth which is slowly ironing out the arithmetic for landlords.

“Lower house prices and higher rents will combine to shore up the rental market as more landlords hold off on the decision to sell. On the flip side, this will also weigh down on the government’s capital gains receipts handed over by landlords selling up over the next few years.”

Some investors made a loss, as 6% of landlords in England & Wales sold their buy-to-let for less than they bought it for, up from 5% last year.

Meanwhile 19% of investors selling a flat and 22% of investors in the North East sold for less than they paid.

Rents across Great Britain rose 9.9% on last year, the 27th consecutive month where rental growth has been running above 5%.

Beveridge added: “New homes coming onto the market continue to achieve record rents and in the short term it’s hard to see what would put concerted downward pressure on the pace of growth.

“With around 35,000 landlords coming off fixed rate mortgages each month, the upward pressure on landlords’ costs marches on.

“In the run up to remortgaging, landlords are fighting to balance the books by paying down debt and hiking rents that have dropped below market rate.”

House prices in Northern England have risen the most over the last seven years, while in parts of London and the South East prices have remained static.

Even so, higher average prices mean that in cash terms London landlords who sold up still saw the largest gross capital gains. So far this year this figure stood at £308,500.

However, this number is down 3.4% from £319,300 last year and 15% down from a peak of £365,000 in 2016 due to slower price growth.