The amount of money sellers make from their homes has been shrinking since the market peaked in 2022, with average seller gains falling below £100,000 for the first time in three years.
In 2024, the average household in England & Wales sold their home for £91,820 more than they paid for it, having owned it for 8.9 years. This figure has fallen by £10,830 since 2023 and is down from a peak of £112,930 in 2022 when strong house price growth pushed gross gains (before any costs) into six figures for the first time.
In percentage terms, returns from property have fallen to the lowest level since at least 2015, when our records began. Last year, the average seller in England & Wales sold their home for 42% more than they paid, down from a 48% increase in 2023.
This decline in gross profits reflects the cooling of the market after the pandemic-fuelled boom. As mortgage rates rose and economic uncertainty increased, house price growth moderated across the country. Consequently, sellers who bought more recently have seen smaller gains compared to those who purchased their homes a decade or more ago.
These proceeds typically fuel moves up the property ladder. However, smaller and slower equity gains over recent years, particularly for flat owners, have made this more challenging. Despite lower price gains last year, 91% of households selling up nationwide achieved more than they paid.
Regional Variations Persist, But Gap Narrows
Seller gains are gradually evening out across the country. London, long the leader in property price appreciation, saw average seller gains fall below £200,000 for the first time since our records began in 2015. The capital's sellers made an average of £172,350 in 2024, down £31,840 from 2023.
This has been mainly driven by slower house price growth in London over the last decade. In percentage terms, the average London home sold for 44% more than its purchase price, a figure that’s been declining since peaking at 100% in 2016. Londoners are now equally as likely to make a loss as those selling a property in the North East.
Meanwhile, Wales led the way in percentage terms for the third consecutive year, with the average home selling for 48% more than its purchase price. The share of six-figure gains coming from the Midlands and North of England has risen from 17% in 2016 to 29% in 2024, as the gap between property prices in London and the rest of the country continues to narrow.
Merthyr Tydfil replaced Barking and Dagenham as the local authority where sellers made the biggest percentage gains nationally in 2024. Here, the average seller in 2024 received 68% more for their home than they paid. Just two London Boroughs (Barking & Dagenham and Waltham Forest) featured in the top 10 list in 2024, compared to all 10 located in the capital in 2020, 2019 and 2018.
Longer-term Ownership Still Yields Higher Returns
Those who have owned their homes for longer periods typically see larger gains. Homeowners in England & Wales who sold in 2024 after 20 years of ownership saw their property values rise by 83% on average. This is triple the 27% gross gain made by those who bought just five years ago.
However, these gains are not as substantial as they were for long-term owners who sold in previous years. For example, those who sold in 2019 after 20 years of ownership saw their property values more than treble (220%). This difference highlights the impact of slower house price growth in recent years.
London: A Tale of Two Timeframes
Londoners who bought after 2014 and sold in 2024 have generally underperformed both inflation and the rest of the country. However, those who purchased before 2013 have seen significantly higher returns.
For example, the average homeowner sold their property in the capital last year for 121% more than they paid 20 years ago, outperforming the England & Wales average of 83% and inflation at 77%.
This slower house price growth in London in the medium term has limited people's willingness and ability to move. London sellers in 2024 had owned their properties for an average of 9.6 years - longer than the national average of 8.9 years. Just 25% of London sellers had bought and sold within five years, compared to 34% nationally.
Houses Outperform Flats
The divergence between houses and flats that emerged during the pandemic has continued into 2024. House sellers saw more than double the gains of flat sellers last year. The average house sold for 47% (or £102,500) more than its purchase price, compared to just 23% (or £48,050) for flats.
This disparity is even more striking when looking at shorter-term gains. House sellers saw more price growth over the last five years than flat sellers saw in the last 10 years. The average house seller who bought five years ago made a gross gain of 31% in 2024 - higher than the 30% gain for flat sellers who bought a decade ago.
This weaker equity growth for flats has limited owners' ability to move up the property ladder, with just 32% of flat owners who sold in 2024 having moved within five years, down from 40% in 2019.
Looking Ahead
While the vast majority of sellers still achieved a gross profit on their sale, the days of rapid equity accumulation seen during the pandemic appear to be behind us.
The combination of more modest price growth, higher mortgage rates, and increased transaction costs, such as stamp duty, will likely encourage homeowners to stay put for longer.
In London, the issue is particularly acute, with property values in some areas remaining below 2016 levels, discouraging moves. Until property prices recover, or transaction and mortgage costs decrease, homeowners are likely to stay put for longer.
However, a recovery in property prices is underway across the country, fuelled by lower mortgage rates. We expect this to encourage some households who have stayed put for the last decade to consider moving, despite making smaller gains. Our forecast predicts a 3.0% rise in prices across Great Britain in 2025, with London expected to lead the way at 4.0% growth.
