In 2015, the average gross capital gain was £77,830 and since then, gains had remained above £80,000, Hamptons International’s Monthly Lettings Index showed.
It was also the second consecutive year average gains have fallen.
Hamptons International said the £2,400 yearly decline was partially because landlords who sold in 2018 would have purchased their property in 2009 when the market crashed.
Landlords who sold in 2019 typically owned the property for nine years and saw a 42 per cent gross gain on the initial investment.
In 2019, 84 per cent of landlords who sold their buy-to-let property in England and Wales made a pre-tax capital gain. Landlords in London and the South East benefitted the most, bolstered by high house prices and strong price growth.
On average, 97 per cent of landlords in London sold their property for more than they paid for it.
Landlords in the North East were most likely to make a loss as 45 per cent sold their property for less than they originally paid for it in 2019.
In monetary terms, the average London landlord made a gross gain of £253,580, followed by the South East, where the average gross capital gain was £104,930.
On the lower end of the scale, in the North East the average landlord saw a gross gain of just £11,710.
Rental growth
Rents on renewed tenancies fell 1.6 per cent in May, the third consecutive monthly fall.
London and the South East were the only regions where rents fell annually, down 4.7 per cent and 1.2 per cent year-on-year respectively.
However, outside of London rents rose 0.9 per cent year-on-year overall. Scotland recorded the strongest yearly rental growth in May at 3.6 per cent, followed by Wales with 3.4 per cent and the North with 2.3 per cent.
Aneisha Beveridge, head of research at Hamptons International, said: “The profitability of the buy-to-let market has been questioned in recent years and is one of the main reasons why some landlords have chosen to sell up.
“But one of the biggest bonuses from cashing in comes from the capital gain on a property. With house price growth expected to stay lower than in the past, more landlords are having to switch their focus to maximise rental income, rather than rely on capital growth.”
