While fewer people have decided to list their homes for sale during the more subdued housing market we have seen since last autumn, there is one notable exception. This year has seen an increase in older homeowners, likely downsizers, selling up for the first time in decades.
By looking at the properties that have come onto the market so far in 2023 and using Land Registry data to find out when these homes were originally bought, we have calculated that the average seller marketing their home this year bought their property 14.3 years previously, up from an average of 13.5 years in 2022.
While this doesn’t sound like a big shift, it is significant because these numbers don’t tend to move particularly quickly. Indeed, this year’s housing market is increasingly being driven by those who have owned their homes for far longer: of the sellers who put their home up for sale so far in 2023, almost a third (32%) bought their properties at least 20 years ago, up from 27% in 2022.
By contrast, fewer people who bought their homes within the past five years have put them up for sale this year, with the proportion dropping by 1 percentage point to 15%. This potentially reflects the fact anyone who purchased at the height of the pandemic would possibly face selling their home for less than they paid. That said, however, the average seller who bought their property within the past five years has listed it for sale for £77,000, or 30%, more than the amount they bought it for.
The average seller who owned their home for longer potentially stands to make a much larger gain – they have advertised their home for £190,000, or 157%, more than what they paid. And those vendors who purchased more than 20 years ago are set to make the largest average gains of £292,000, or 355%. These homeowners have reaped the benefits of strong capital growth and have likely either paid off their mortgage or are very close to doing so. If they are downsizing, as they probably are given the increase in the number of detached homes being listed for sale, they will be able to extract some of the proceeds of these gains.
Although detached homes don’t tend to come onto the market very often, one in five sellers listing their home so far in 2023 is offloading a detached house, up from 17% last year. Of those owners who initially bought more than 20 years ago, 22% are now selling a home with four or more bedrooms, up from 20% in 2022.
On a regional basis, the biggest increase in the share of households selling up after more than two decades has been in the North West and North East. These are markets where, up until the last few years, fewer people had moved because house price growth had lagged behind the South. In the North East in particular, average home values only returned to their pre-2008 peak in 2021, a factor which will have limited some homeowners' ability to pay off their mortgage when moving.
London, where sellers have typically enjoyed the strongest house price gains, has also seen a marked increase in the share of households selling up after more than 20 years – these owners are marketing their homes for an average of £620,000, or 464%, more than they paid. It is possible that these sellers are making post-Covid moves, with the wealthiest selling their long-held second homes to reduce outgoings.
The shift towards more older homeowners selling up supports the theory that downsizers, who have typically held off from selling in recent years, are now making their post-Covid moves, prompted by rising energy and living costs. Quieter markets also tend to benefit older homeowners, who often aim to line up their onward purchase before selling their cherished family home.