Despite falling house prices last year, 93% of households still sold their home for more than they paid. The average household in England and Wales who bought a property within the last 20 years sold it in 2023 for an average of £102,650 more than they paid, the second-highest figure on record.
Collectively, this means 2023 sellers realised a £103bn uplift in value between what they paid for their home and what they sold it for. However, the average gross profit fell by £10,300 or 9% compared to those who sold in 2022. Due in part to the small house price falls last year.
These proceeds are mostly reinvested back into the housing market and go towards the purchase of another home, so they’re rarely realised in cash terms. However, the numbers illustrate how the scale of historic price growth sheltered movers last year, freeing up cash to cover moving costs.
In percentage terms the average seller in England and Wales last year made a 48% gain, down from 54% in 2022. The decrease in average gains is partly due to small house price falls last year, but also because more households moved home sooner. The average 2022 seller had owned their home for 9.0 years, but this fell slightly to 8.9 years in 2023.
This figure was pulled down by a spike in households moving after just two years, suggesting an unwinding of ’the race for space’. 8% of households who sold a home last year had bought just two years earlier in 2021. This compares to 5% of 2022 sellers and 6% of 2019 sellers who bought two years previously.
These households who bought in 2021 and sold in 2023 were disproportionately likely to be selling a home in the suburbs or countryside. Two-thirds (66%) of them sold a home in a small town or suburbs, compared to a norm of 64%. Meanwhile, 12% of 2023 sellers sold a home in the country, compared to a longer-term average of 9%.
Double-digit house price increases since Covid have meant households moving within two years could still achieve a higher price than they paid. The average vendor who bought in 2021 sold their home in 2023 for £56,170 or 23% more than they initially paid.
Sellers in every region saw their gains fall in percentage terms between 2022 and 2023. However, slower house price growth in London since 2016 has meant that sellers in Wales are now making bigger gains than Londoners.
Since 2016, house prices have risen faster outside of London. Overall, 88% of London sellers sold their home in 2023 for more than they initially paid. However, just 72% of those who bought in 2016 and sold in 2023 made money on their home. Most of these sellers owned homes in Prime Central London, where the average property still costs less than it did when the market peaked in 2016.
Despite this, higher property prices mean that Londoners continue to make the biggest gains in cash terms. The average Londoner sold their home last year for £204,190 more than they paid for it, having bought it 9.5 years ago. London sellers also owned their homes for the longest period of time, which partly reflects the larger cohort of would-be sellers whose homes are not currently worth what they paid.
There are 156 local authorities across England & Wales where the average homeowner made a six-figure gain when selling their home, down from 181 areas in 2022. Having owned for 10.8 years on average, households in Kensington & Chelsea made the biggest cash gains having sold their property last year for an average £680,580 more than they initially paid – more than double the average house price in Great Britain.
Proportionately however, the top 15 areas where sellers have seen the biggest gains are a mix of Outer London suburbs alongside areas that have seen significant development over the last decade such as Bristol, Trafford and Manchester.
Barking and Dagenham tops the list where the average household sold their home last year for 74% more than they initially paid, having owned it for an average of 11 years. Three regions in Wales also feature within the top 15, having seen strong recent house price growth. Back in 2019, nine London Boroughs featured in the top 15 list, compared to just three in 2023.
Households rarely move when they’re faced with the prospect of selling their home for less than they paid. Generally, the chances of selling at a loss peak within the first few years of ownership. But for some Londoners, that stretches back to when parts of the market peaked in 2016. Many households who bought a home between 2014 and 2016, predominantly in Prime Central London, face selling at a loss which has reduced sales numbers over the last few years. However, we expect prices to start rising in London later this year which may start to unlock some of these moves.
