Landlords find profits are on the slide when selling up

The average landlord who sold a buy-to-let property last year made nearly £80,000 pre-tax profit – less than in previous years.

On average, the landlord had owned the property for 9.6 years.

While 85% of landlords selling up made a profit, 15% made a loss, according to Hamptons International.

Last year’s average pre-tax profits were £3,660 (4.4%) less than in 2017.

The biggest profits were made by landlords selling up in London, who saw pre-tax profits of £248,120. This was on average £24,000 less than in 2017.

The average pre-tax profit earned by a landlord who sold up fell in five out of ten regions between 2018 and 2017 as house price growth slowed.

Landlords who sold their buy-to-let in the north-east made the smallest average gain at £11,810, £4,270 less than in 2017.

There were four local authorities in England and Wales where landlords were more likely to sell their buy-to-let for less than they paid for it last year – South Tyneside, Sunderland, Darlington and Middlesbrough.

Landlords who do make a profit when they sell a buy-to-let property have to pay Capital Gains Tax. On an average profit of £80,000, this would likely be in the region of £19,000.

Hamptons estimates that since 2016 nearly 120,000 landlords have sold up and left the industry.

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2 Comments

  1. Woodentop

    Hamptons estimates that since 2016 nearly 120,000 landlords have sold up and left the industry.

     

    No surprise that government haven’t worked that out.

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  2. Michael Gatsby

    The market is no longer how it used to be, A lot of new buyers have entered the market reducing the level of profit in properties. Its no wonder government have introduced so many new tax deductions to take advantage of.

     

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