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Investors rejoice – capital appreciation boost sees £16k in BTL returns

Research by Rentd has revealed that, despite the government’s best efforts, the return on a buy-to-let (BTL) purchase currently sits at £16,311 per year – up from £6,220 in 2019.

The rental portal looked at the ongoing costs associated with a buy-to-let investment and how this weighed against the return on offer on an annual basis.

By doing so, it was able to determine the ‘true’ cost of being an investor and landlord in today’s market.


Initial start-up costs

For those starting out in the buy-to-let sector, there are some initial costs to consider when investing. The most notable being the mortgage deposit required – which at an average of 25% for a buy-to-let property – equates to £64,750 on the current average buy-to-let price of £259,000. 

There’s also the inflated cost of stamp duty versus a residential purchase, averaging £10,720 on the average buy-to-let property, with agency costs such as tenant finding fees (£1,277) and tenancy deposit registration (£40) bringing the total cost of this initial investment to £76,787. 

Ongoing costs

But once your buy-to-let investment is up and running how profitable is it in the current market? 

The largest ongoing cost associated with a buy-to-let is the annual rate of interest paid on a mortgage, which equates to £8,159 on the average buy-to-let purchase. Annual maintenance costs also average £2,590 along with £1,532 per year in agency management fees. 

Then there are the smaller costs associated with a buy-to-let including void periods (£700) and landlord insurance, with this total sitting at £13,150 per year. 

Buy-to-let returns

In contrast to the outgoing costs, the average buy-to-let is estimated to return £12,68 per annum in rental income – a yield of 4.93%. This means that the average landlord is actually making a loss of nearly £400 when comparing rental income to the ongoing costs of owning a buy-to-let property. 

However, over the last decade, the average rate of capital appreciation on a buy-to-let property has sat at 6.45%, meaning an increase in property value of £16,693 per year.

Rentd says this level of capital appreciation boosts the annual return on investment to £16,311, considerably higher than the same total return of £6,220 in 2019 and £5,150 in 2020. 

Ahmed Gamal, founder and chief executive officer of Rentd, says fine-tuning your portfolio will ensure that you cover the required ongoing costs while maximising your profit margins.

“For many, this means investing in areas with above-average rental yields, or high demand urban hubs that provide a lower chance of long void periods, all while negotiating with their agent on fees to keep ongoing costs at a minimum,” he explains.

“Even still, the running costs of the average buy-to-let are likely to eclipse the annual rate of rental income and the real silver lining of the sector in recent years has been the high rates of capital appreciation seen on an investor’s portfolio.”

Gamal concludes: “We don’t believe that this should be the case and removing the unnecessary costs involved in rental management has been the Rentd mission from day one."

“By securing tenants, reducing void periods, arranging viewings, carrying out referencing checks, sorting lettings agreements, deposits, ongoing rent and more, we’ve reduced the time and money required from a landlord so they can maximise the financial prosperity of their property portfolio.”

True cost of a landlord - 2021

Initial Start-up Costs

Deposit @25%


Based on average estimated B2L property cost




Agency fees (to find tenant)


Tenancy deposit registration


Total Start-up Costs


Ongoing Costs

Void periods


Mortgage interest per annum


Agency management fees per annum


Landlord insurance


Average annual maintenance and repairs


Total Ongoing Costs


Buy-to-Let Income

Average annual rental income


Average rental yield (%)


Capital appreciation - average per year for last 10 years


Capital appreciation - in £ terms


Total Buy-to-Let Income


What's Left (Buy-to-Let Income - Ongoing Costs)

Total Buy-to-Let Income - Total Ongoing Costs



Initial start-up costs


Buy-to-Let Income

What's Left

















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