Homeowners made average £100,000 profit when selling up last year
A study has revealed that homeowners in England and Wales who sold their properties last year made an average profit of £100,000 more than what they originally paid.
The research was conducted by estate agent Hamptons, which analysed data from the past 20 years. The study found that those who bought a property within this timeframe and sold it last year made an average profit of £102,650.
However, this was a decrease from the record gross profit of £112,930 in 2022, according to the Land Registry data used in the research. It was also found that more than nine out of ten (93%) sellers in 2023 sold their homes for more than they had paid, having owned their homes for an average of nearly nine years.
In terms of percentages, the average seller in England and Wales last year made a 48% gain, down from 54% in 2022. The decrease in average gains is partly due to small house price falls last year, but also because more households moved home sooner, researchers said.
The average 2022 seller had owned their home for 9.0 years, but this fell slightly to 8.9 years in 2023. Interestingly, one in 12 (8%) of those who sold in 2023 had bought their home two years earlier, increasing from 5% of those who sold in 2022 who had made their purchase two years earlier.
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Research from Hamptons suggests that households who bought in 2021 and sold in 2023 were more likely to be selling homes in the suburbs or countryside, hinting at a change of heart after the "race for space" during the Covid-19 pandemic. Despite this, those who bought in 2021 still managed to sell their homes in 2023 for an average of £56,170 or 23% more than they initially paid.
The report also revealed that slower house price growth in London has led to sellers in Wales making bigger percentage gains. In 2023, the average home in Wales sold for 53% more than its purchase price, beating the London average of 51%. This is due to stronger price growth in Wales in recent years, partly because of the slower recovery in house prices there after the 2008 financial crash.
In particular, the South Wales Valleys saw some big percentage gains for home sellers last year. Sellers in Merthyr Tydfil made a 69% or £60,640 average gross profit in 2023, while those in Rhondda Cynon Taff gained an average of 65% or £54,530. In Blaenau Gwent, sellers made an average gross gain of 67% £46,390.
The report also highlighted the north west of England as a region where significant house seller gains were made in percentage terms in 2023. In Manchester, sellers made a huge profit of 63% or £84,930 last year; in Trafford, they pocketed 65% that's £145,730 and in Oldham, the gain was 62% or £66,020.
London homeowners are still making the biggest cash gains when they sell their homes. Last year, they sold for an average of £204,190 more than what they paid. In Kensington and Chelsea, London, people who sold their homes last year got a whopping £680,580 more than their original price.
But up in the north east of England, sellers made the smallest profits, with an average gain of £40,410 or 33%. Aneisha Beveridge from Hamptons said: "Despite falling house prices last year, 93% of households still sold their home for more than they paid, netting themselves just over £100,000 on average."
She added: "These proceeds are mostly reinvested back into the housing market and go towards the purchase of another home, so they're rarely realised in cash terms. However, the numbers illustrate how the scale of historic price growth sheltered movers last year, freeing up cash to cover moving costs."
"Double-digit house price increases since Covid have meant households moving within two years can achieve a higher price than they paid. Historically these are people moving due to a change in circumstances."
"However, the spike in the share of households moving within two years goes beyond that and suggests an unwinding of 'the race for space'. Most of these sellers are selling larger homes in the country, often in favour of a move back to the suburbs or city."
"Households rarely move when they're faced with the prospect of selling their home for less than they paid. Generally, the chances of selling at a loss peak within the first few years of ownership. But for some Londoners, that stretches back to when parts of the market peaked in 2016.
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"Many households who bought a home between 2014 and 2016, predominantly in prime central London, face selling at a loss, which has reduced sales numbers over the last few years. However, we expect prices to start rising in London later this year which may start to unlock some of these moves."
Hamptons used Land Registry price paid data to match homes that were sold in 2023 with their previous purchase. The data looked back 20 years and Hamptons said, if anything, this may understate overall gains, since generally homeowners who have owned a property for more than 20 years will likely have seen stronger house price growth.
The average gains calculated were across all sales, including homes sold for a profit and those sold at a loss. The gains do not consider any money spent on properties.
Here are the average 2023 seller gains, according to Hamptons, with the percentage of people selling their home for more than they paid, the average cash difference between the sale and purchase price, the average percentage difference between the sale and purchase price and the average years of ownership: London, 88%, £204,190, 51%, 9.5; South East, 94%, £134,870, 48%, 9.0; East of England, 95%, £115,310, 49%, 8.7; South West, 95%, £110,510, 48%, 8.3; West Midlands, 94%, £79,350, 46%, 8.6; East Midlands, 95%, £78,130, 49%, 8.6; Wales, 95%, £71,470, 53%, 8.9; North West, 92%, £66,570, 48%, 8.9; Yorkshire and the Humber, 93%, £63,800, 44%, 8.9; North East, 87%, £40,410, 33%, 8.0.
* An AI tool was used to add an extra layer to the editing process for this story. You can report any errors to [email protected]
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