Analysis from Zoopla found that when selling their home in the last 18 months, flat owners in England and Wales saw an average gain of just £27,000.
Across the board, sellers in England and Wales sold their homes for 38% more than they paid, making a gain of £72,000. Further, the average time between buying and selling a home for transactions in the last 18 months was nine years.
Meanwhile, semi-detached homes attracted an average profit of £80,000 when sold, a 44% increase, while terraced homes sold for 40% or £64,250 more.
Zoopla said the difference in the gains made by detached homeowners and flat owners was a result of changing buyer preferences and affordability pressures.
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|
Property type |
Average capital gain released during sale (£) |
Average gains released during sale (%) |
Average time in property (years) |
Average sold price (£) |
|
Flat |
£27,000 |
15% |
9 |
£220,000 |
|
Terraced |
£64,250 |
40% |
9 |
£236,000 |
|
Semi-detached |
£80,000 |
44% |
9 |
£273,500 |
|
Detached |
£122,500 |
45% |
9 |
£410,000 |
Smaller gains for longer-term tenants
Zoopla’s research showed that people who stayed in their properties for longer – 15-20 years – made less of a gain than those who sold after a shorter 10-15-year period.
It said this ‘tenure trap’ was the legacy of the global financial crash, which saw property prices outside of Southern England recover more slowly.
For example, in Northern England, the gain made by homeowners selling up after 10-15 years was £132,000 on average, while those who sold after 15-20 years gained £136,250.
By contrast, homeowners in London who sold after 10-15 years made a £175,000 gain, while those who sold after 15-20 years saw a significantly larger return of £235,000.
The largest profit was made by homeowners in London who held on to their property for more than 20 years, with a gain of £361,500 on the original price paid.
Zoopla said these homeowners bypassed the impact of the global financial crash and benefited from multiple periods of strong growth.
|
Length of homeownership |
London |
Midlands |
Northern England |
Southern England |
Wales |
|
Fewer than 5 years |
£40,000 |
£28,000 |
£27,955 |
£30,000 |
£32,500 |
|
5-10 years |
£52,000 |
£61,500 |
£55,050 |
£65,000 |
£65,000 |
|
10-15 years |
£175,000 |
£100,000 |
£75,000 |
£132,000 |
£85,005 |
|
15-20 years |
£235,000 |
£85,000 |
£45,000 |
£136,250 |
£60,050 |
|
20-plus years |
£361,500 |
£156,200 |
£121,000 |
£225,000 |
£130,050 |
Richard Donnell, executive director at Zoopla, said: “British homeowners are sitting on sizable capital gains from years of historic[al] house price inflation, which varies widely by geography and property type. The scale of gains from historic[al] price inflation is unlikely to be repeated in future, with lower levels of annual price inflation in more recent years than in the past.
“Estate agents currently have the highest stock of homes for sale in over seven years. This is boosting choice for buyers, meaning it is very important that sellers are realistic about how they set their asking price. Homes that attract limited interest and require a price reduction can take twice as long to sell.”
