Homeowners in England and Wales typically made six-figure gains when selling their property last year, new data has revealed.
The average household in England and Wales who bought within the last 20 years and sold in 2023 sold their home for £102,650 more than they paid for it, according to analysis by Hamptons.
While this is slightly less than the £112,930 average gains made by sellers in 2022, it is only the second year on record where the average seller has made over £100,000 more than they paid for their property.
Hamptons estimates the typical seller in 2023 sold for 48 per cent more than they paid for their home. This is down from 54 per cent in 2022.
Average seller profit across England & Wales: The typical household that bought a property within the last 20 years and sold it in 2023 made £102,650
Of course, whether a person has fared better or worse than the average, will hinge on where and when they bought and sold.
While many will have made six digit gains when selling, a small minority sold at a loss in 2023, according to Hamptons.
Overall, 93 per cent of households sold their property last year for more than they paid for it, having owned for an average of 8.9 years.
Aneisha Beveridge, head of research at Hamptons, said: ‘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.’
Where did sellers make the biggest gains?
Slower house price growth in London over the last few years has meant that in percentage terms, sellers in Wales are now making bigger gains than Londoners.
In 2023, the average home in Wales sold for 53 per cent more than its purchase price, surpassing the London average of 51 per cent which has been falling for at least the last five years.
According to Hamptons, this reflects the tail end of the housing market cycle, where Wales has had stronger price growth in recent years.
This is in part due to the slow recovery to house prices in Wales following the 2008 financial crash.
Changing market: 12 of the 15 local authorities where sellers saw the largest gains were outside London, up from six before the pandemic in 2019
That said, sellers in Barking and Dagenham saw the biggest percentage gains, according to Hamptons, with an average 74 per cent gain enjoyed by households selling there last year.
London was one of the fastest housing markets to recover and boom following the 2008 financial crisis.
Since 2016, house prices have risen faster outside of London. Overall, 88 per cent of London sellers sold their home in 2023 for more than they initially paid.
However, just 72 per cent of those who bought in 2016 and sold in 2023 made money on their home.
Most of these sellers owned homes in Prime Central London, where the average property still costs less than it did when the market peaked in 2016.
For example, in the City of Westminster, the average flat or maisonette has fallen from £973,000 at the end of 2016 to £814,000 as of November last year. That is an 18 per cent fall in prices over the past seven years.
Despite this, higher property prices mean that most Londoners continue to make the biggest gains in cash terms.
The average Londoner sold their home last year for £204,190 more than they paid for it, having held it for an average of 9.5 years.
Having owned for an average of 10.8 years, households in Kensington & Chelsea made the biggest cash gains having sold their property last year for an average £680,580 more than they initially paid – more than double the average house price in the UK.
London versus North East of England: Share of households selling their home in 2023 for more than they paid by year of purchase
Meanwhile, sellers in the North East continued to make the smallest gains in both cash and percentage terms, according to Hamptons.
The average household who sold in 2023 achieved £40,410 or 33 per cent more than they initially paid.
While 98 per cent of Londoners who bought in 2007 and sold in 2023 made a profit on their home, just 59 per cent of sellers in the North East made a gain.
Yet the nature of the house price cycle means that those who bought in the North East between 2014 and 2022 were more likely to sell their home in 2023 at a profit compared to those who bought in London.
2023 seller gains by region: There are 156 local authorities across England & Wales where the average homeowner made a six-figure gain when selling their home, according to Hamptons
Aneisha Beveridge of Hamptons added: ‘Despite falling house prices last year, 93 per cent of households still sold their home for more than they paid, netting themselves just over £100k on average.
‘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.
Why sellers made smaller gains last year than in 2022
Hamptons attributes the decrease in average gains as partly due to small house price falls last year.
UK house prices recorded their fastest annual fall since 2011 in November, according to the latest figures from the Office of National Statistics.
According to the data, the average sold price fell by 2.1 per cent in the 12 months to November 2023.
The figure was also pulled down by a spike in households moving after just two years.
According to Hamptons, 8 per cent of households who sold a home last year had bought just two years earlier in 2021.
This compares to 5 per cent of 2022 sellers and 6 per cent of 2019 sellers who bought two years previously.
Share of sales by length of ownership: Some 8% of households who sold a home last year had bought just two years earlier in 2021. This compares to 5% of 2022 sellers
It suggests that last year’s post-pandemic movers had second thoughts about their homes in the countryside. Some 12 per cent of 2023 sellers sold a home in the country, compared to a longer-term average of 9 per cent.
Even so, the average seller who bought in 2021 sold their home last year for £56,170 or 23 per cent more than they initially paid.
‘Double-digit house price increases since Covid have meant households moving within two years can achieve a higher price than they paid,’ adds Beveridge.
‘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.’
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