House sellers net £95,000 profit in 2021: Hamptons 

House sellers net £95,000 profit in 2021: Hamptons 
Written by Publishing Team

The average property seller in England and Wales, who has bought a home in the past 20 years, sold the house for £95,360 more than he paid for the dwelling last year, up from £83,550 in 2020, according to the Hamptons.

The real estate agent says the strong growth in home prices since the pandemic began has boosted gains for sellers, as buyers have paid a premium for larger properties as working from home becomes more established.

UK house prices rose 9.8% in December 2021 year-on-year, leaving the average UK property price at £276,091, According to the latest data from Halifax.

Hamptons notes that while the average gross profit made by someone selling a detached home rose to £151,840, the seller’s flat gains fell to £54,690 last year.

It adds that 19% of apartment sellers in 2021 experienced a property loss compared to 4% of detached home sellers.

People’s reassessment of their homes since Covid-19 started has sellers moving sooner. The real estate agent says 64% of sellers in 2021 sold their homes within 10 years, compared to 59% of sellers in 2019.

92% of sellers sold their real estate 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 generated a combined aggregate gain of £128 billion from property sales last year.

She says: “The increase in seller profits was boosted by the sale of larger homes, which are usually owned for longer and thus benefited from increased price growth. Detached home owners accounted for 23% of sellers – and 37% of profits – in England and Wales last year. , up from 20% in 2019.”

Apartment owners were the only sellers to see their earnings fall between 2020 and 2021. The average seller who sold in 2021 made a total profit of £54,690, or 29%, down from £62,360 in 2020.

Meanwhile, average gains on balcony property rose to £79,370, an increase of £8,820, in 2021 and semi-detached sellers made £92,430, an average increase of £11,100.

Regionally, London sellers continued to generate the largest absolute gross profit. However, weaker house price growth over the past six years means 2021 marks the first time since 2015, the time when agent records began, with the average London seller making a profit of less than £200,000.

The average London seller sold his property last year for £197,730 more than he paid 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 Northeast were less likely to turn a profit last year. The average seller in the area made an average gross profit of £28,960, of whom 22% sold their homes for less than they bought – on average 7.9 years ago.

Typically, the agent says, the longer someone owns the drug, the more they will gain. A 2021 seller who bought 20 years ago saw the value of their property rise 180%, compared to 23% for someone who bought five years ago.

They are also less likely to lose, as less than 1% of sellers who bought 20 years ago incur a loss selling their homes in 2021 compared to 9% of buyers who bought five years ago.

“Rising home prices over the past 18 months have increased the amount of money homeowners have made,” says Anisha Beveridge, head of research at The Hamptons.

But while owners of larger properties have benefited from buyers looking for more space, apartment owners have seen weaker returns.

Home price gains are primarily due to two factors – the length of time people have owned their homes and the point at which they bought them in the housing cycle. Typically, homeowners who have owned their property for a longer period of time have seen greater price growth and therefore greater profits.

Although sellers never see most of these profits as they are reinvested back into the housing market when they make their next purchase.

Last year’s home price gains may be close to their peak. Average sellers bought in 2021 in 2012, since then when house prices across England and Wales rose 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 sellers’ gains have fallen since 2016.”

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