Data from the London-based letting agent Hamptons and the Land Registry show an average gain of £95,360 from the sale in England and Wales of a house or flat bought within the past 20 years. That’s an increase from £83,550 in 2020, and covers several types of homes, including flats and terraced, semi-detached and detached houses.
The average gross gain was highest, at £151,840, when calculated only for detached houses.
However, gains by owners who sold flats decreased last year, falling from £62,360 in 2020 to £54,690 in 2021. Nearly 20 per cent of owners who sold a flat last year lost money on their property while that applied to just four per cent of owners who sold a detached house, Hamptons said.
Aneisha Beveridge, head of research at Hamptons, said: “Soaring house price growth over the last 18 months has driven up the amount of money homeowners have made. But while owners of larger properties have benefitted from buyers looking for more space, flat owners have seen weaker returns.”
The average rise in sellers’ profit was also lifted by the sale of bigger homes, usually owned for longer time periods. Conversely, owners of flats tend to hang onto them for shorter periods and fail to reap as big of an increase in value before selling.
Gains in the sales of houses were driven mainly by two factors, Beveridge said, including “the length of time people have owned their home and the point at which they bought in the housing cycle. Typically, homeowners who have owned their properties for longer have seen more price growth and therefore made bigger profits.”
She pointed out, however, that “most of these profits are never seen by sellers as they are reinvested back into the housing market when they make their next purchase.”
Will the gains continue? Probably not for long at this level. “House price gains last year may have been close to their peak,” Beveridge added.
While the average seller in 2021 bought in 2012, and since then house prices across England and Wales have risen by 55 per cent, she said that sellers in 2022-2024 “are likely to have bought more recently, during a period of weaker price growth. We’ve already seen this in London, where seller gains have been falling since 2016”.
Unsurprisingly, sellers in London still reaped the largest gains, although growth in prices slowed last year, meaning that owners’ gross gains were held to an average of below £200,000 for the first time since 2015, when Hamptons began tracking the figures. Averaged figures showed that sellers in the London borough of Barking and Dagenham saw the biggest percentage gain anywhere in the country, selling for 76 per cent more than they paid for it.
Covid-19 seemed to spur a few more people to sell their homes, 64 per cent of sellers last year sold within 10 years, compared to 59 percent in 2019, Hamptons said. A record 92 per cent of sellers in England and Wales sold their property in 2021 for more than they had paid for it, after owning it for an average of 8.8 years.