Buy-to-let  

BTL property sales fall to seven-year low

BTL property sales fall to seven-year low
 Credit: Chris Ratcliffe/Bloomberg

The number of properties sold by landlords last year slowed to a seven-year low, despite the first annual rise in profits on sales in more than five years.

Analysis of Land Registry data by Hamptons showed 131,900 properties were sold by landlords last year - the smallest number since 2013, when there were 105,830 sales.

Aneisha Beveridge, head of research at Hamptons, said: “A pause in the housing market during the first Covid-induced lockdown, which suppressed overall transactions, combined with an eviction ban throughout the remainder of 2020, limited the opportunity for landlords to sell up.”

But according to Hamptons, landlords who sold a buy-to-let property in England and Wales last year made an average profit of £82,450 - up from £79,060 in 2019, marking the first annual rise in more than five years.

The estate and letting agent added that 77 per cent of landlords across England and Wales would have been liable for capital gains tax last year.

Beveridge continued: “Over the last few years, the average capital gain made by a landlord has been shrinking. But despite the pandemic, stronger house price growth seems to have reversed this trend.”

Average house prices increased by 8.5 per cent over the year to December 2020, according to the UK House Price Index, with the average price reaching a record high of £252,000 in December.

The Halifax house price index also indicates a monthly rise in prices since January, with the latest index, published last week (April 9), showing prices in March were 1.1 per cent higher than in February.

But Russell Galley, managing director at Halifax, said he expected house price growth to slow “somewhat” by the end of the year, given current levels of uncertainty and the potential for higher unemployment.

Adam Wells, director at Lloyd Wells Mortgages, said his firm had spoken to many landlords looking to secure long-term fixed rates amid uncertainty on house prices.

Wells said: “We have spoken to a lot of landlords who feel there is a lot of uncertainty with not only house prices, but the rental market as a whole and as such they have wanted to secure long term fixed rates to reduce their exposure to interest rate fluctuations and to provide long term stability.”

chloe.cheung@ft.com

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