On average in 2020, landlords in England and Wales sold their properties for 42 per cent more than they paid for it, pocketing £82,450.
This was a four per cent increase on the £79,060 profit the average landlord made in 2019, the first annual rise for five years.
Landlords in London made the biggest gains, selling up for 71 per cent more than they originally paid and taking home £302,200.
The capital outstripped gains in other areas as most regions saw buy-to-let properties sold for between 34 and 45 per cent higher than the previous purchase price.
Landlords in the North East had the lowest returns, selling for just 16 per cent more than the original price. The average profit there was £11,310.
The average rent for a newly let home in the UK increased 4.4 per cent in March to £1,026 a month.
Regions outside London saw the most growth with rents rising by 6.8 per cent annually, the third consecutive month that annual rental growth outside the capital exceeded five per cent.
Last month, every English region recorded rental growth of at least four per cent except for London.
Rents in the capital fell 2.1 per cent to £1,663, the second consecutive month of decline. This was led by inner London rents which dropped 17.1 per cent to £2,131, the 13th consecutive month rents had fallen.
Aneisha Beveridge (pictured), head of research at Hamptons, said: “Last year, the number of homes sold by landlords reached a seven-year low.
“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.
She added: “Landlord sales have been relatively high over the last few years due to tax and regulatory changes that have reduced the profitability for some investors.
“But given tax relief on mortgage interest will be fully phased out from the 20/21 tax year, it seems as though most landlords who would be hit hardest by these changes have already left the sector.”