Vendors’ profits soar - but not in London or if they sold a flat

Strong house price growth since the pandemic began has boosted seller gains with the typical vendor who bought two decades ago and sold in the past year making a gross profit of £95,360.

This is up from a typical £83,550 in 2020.  

These figures come from research by Connells-owned agency Hamptons, which claims that a record 92 per cent of sellers sold their property in 2021 for more than they bought it, having owned it for an average of 8.8 years. 

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 per cent of sellers in England and Wales last year, up from 20 per cent in 2019.

Sellers of detached houses made the biggest gains (£151,840 or 53 per cent), having owned them the longest (9.4 years).  

The average gross profit on a detached home jumped from £132,240 in 2020 and £122,280 pre-pandemic in 2019. 

Flat owners are least likely to sell their home for more than they bought it for, partly because they tend to own for a shorter period (8.2 years in 2021).  

One in five flat sellers in 2021 made a loss on their property compared to four per cent of detached sellers. 

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 per cent, down from £62,360 in 2020.  

On a regional basis, across all property types. 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 that the average London seller made a gain of less than £200,000.

The average London seller sold their property in 2021 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. 

While 91 per cent of London sellers made a gain on their property, 16 per cent of flat sellers in the capital sold at a loss. 

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 per cent of whom sold their home for less than they bought it - on average 7.9 years ago.     

On a regional basis, across all property types. 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 that the average London seller made a gain of less than £200,000.

The average London seller sold their property in 2021 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. 

While 91 per cent of London sellers made a gain on their property, 16 per cent of flat sellers in the capital sold at a loss. 

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 per cent of whom sold their home for less than they bought it - on average 7.9 years ago.     

“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” explains Aneisha Beveridge, head of research at Hamptons. 

“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 per cent.  

“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.”