Soaring house price growth over the last 18 months has driven up the amount of money homeowners have made. The average seller in England and Wales who sold last year (having bought within the last 20 years) made a gross gain of £95,360 (46%), up from £83,550 in 2020. A record 92% of sellers sold their property in 2021 for more than they bought it, having owned their home for an average of 8.8 years.
These 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 gains. Although, most of these gains are never seen by sellers as they are reinvested back into the housing market when they make their next purchase.
The rise in seller profit last year was 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. Sellers made the biggest gains (£151,840 or 53%), having owned them the longest (9.4 years). The average gross gain 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 (19%) flat sellers in 2021 made a loss compared to 4% of detached sellers. Flat owners were the only sellers to see 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.
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 our records began, that the average London seller made a gain of less than £200k. Sellers in the North East were least likely to make a profit last year, making an average gross gain of £28,960, 22% of whom sold their home for less than they bought it - an average of 7.9 years ago.
House price gains last year may have been close to their peak. 2021â€™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, and the rest of the country may be set to follow.