The average property seller in England and Wales who bought a home within the last 20 years sold it for £95,360 more than they paid for the dwelling last year, up from £83,550 in 2020, according to Hamptons.
The estate agent says strong house price growth since the pandemic began has boosted seller gains, with buyers paying a premium for larger properties as working from home becomes more established.
House prices in the UK shot up by 9.8% in December 2021 on an annual basis, leaving the average UK property price at a record £276,091, according to the latest data from Halifax.
Hamptons points out that while the average gross gain made by someone selling a detached house rose to £151,840, flat seller gains fell to £54,690 last year.
It adds that 19% of flat sellers in 2021 made a loss on their property compared to 4% of detached house sellers.
People’s reassessment of their homes since Covid-19 began has caused sellers to move sooner. The estate agent says 64% of sellers in 2021 sold their homes within 10 years, compared to 59% of sellers in 2019.
A record 92% of sellers sold their property in 2021 for more than they bought it, having owned it for an average of 8.8 years.
The agent estimates that sellers across England and Wales made a total gross gain of £128bn from property sales last year.
It says: “The rise in seller profit has been boosted by the sale of bigger homes, which have typically been owned for longer and therefore benefitted from more price growth. Owners of detached houses accounted for 23% of sellers – and 37% of profit – in England and Wales last year, up from 20% in 2019.”
Flat owners were the only sellers to see their gains fall between 2020 and 2021. The average flat seller who sold in 2021 made a gross gain of £54,690 or 29%, down from £62,360 in 2020.
Meanwhile, the average gain on a terrace property rose to £79,370, a gain of £8,820, in 2021 and semi-detached sellers made £92,430, a gain of £11,100, on average.
On a regional basis, London sellers continued to make the biggest absolute gross profit. However, weaker house price growth over the last six years has meant that 2021 marked the first time since 2015, which is when the agent’s records began, that the average London seller made a gain of less than £200,000.
The average London seller sold their property last year for £197,730 more than they paid for it an average of 9.1 years ago. This is down from £207,370 in 2020 and a peak of £243,050 in 2016.
Sellers in the North East were least likely to make a profit last year. The average seller in the region made an average gross gain of £28,960, 22% of whom sold their home for less than they bought it – on average 7.9 years ago.
Typically, the longer someone has owned a property, the bigger their gain, the agent says. The average 2021 seller who bought 20 years ago saw their property rise in value by 180%, compared to 23% for someone who bought five years ago.
They are also less likely to make a loss, with less than 1% of sellers who bought 20 years ago making a loss on the sale of their home in 2021 versus 9% of buyers who bought five years ago.
Hamptons head of research Aneisha Beveridge says: “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.
“House price gains are primarily driven by two factors – 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.
“Although, most of these profits are never seen by sellers as they are reinvested back into the housing market when they make their next purchase.
“House price gains last year may have been close to their peak. 2021’s average seller bought in 2012, since when house prices across England and Wales have risen by 55%.
“However, 2022-2024 sellers 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.”
