How much British homeowners earn when they sell has been revealed – and why profits are shrinking

The amount of money sellers make from their homes is shrinking, according to new data analysis from real estate agent Hamptons.

Last year, the average homeowner in England and Wales sold their home for £91,820 more than they paid for it, despite owning it for an average of 8.9 years.

This figure has fallen by £10,830 since 2023, compared to a peak of £112,930 in 2022.

Despite lower price increases last year, 91 percent still sold their homes for more than they paid.

In percentage terms, real estate returns have fallen to their lowest levels since at least 2015, when the Hamptons’ record highs began.

Last year, the average seller in England and Wales sold their home for 42 percent more than they paid, compared to an increase of 48 percent in 2023.

Real estate profits peaked in 2016 when the average home sold for 60 percent more than its purchase price.

Most of these 2016 sellers bought just after the financial crisis, from which house prices generally recovered quickly, especially in southern England.

“These returns tend to move us up the property ladder,” says Aneisha Beveridge, head of research at Hamptons.

‘However, smaller and slower equity gains in recent years, especially for apartment owners, have made this more challenging.

‘In addition, households have had to contend with higher mortgage and transaction costs, such as stamp duty, making it more expensive to move.’

Homeowners in London are seeing the biggest drops

While sellers in every UK region saw their returns fall between 2023 and 2024, Londoners were among the worst hit.

The average seller in London in 2024 saw the value of their property increase by £172,350 since they bought it, £31,840 less than those who sold in 2023.

This was the first time since at least 2015 that property profits in the capital have fallen below £200,000.

In percentage terms, the average London home sold for 44 percent more than its purchase price, a figure that has fallen from a peak of 100 percent in 2016.

This is not surprising given the stagnation in London property prices since 2016.

Most of Londoners’ gains came in the years immediately following the 2008 crash.

Between April 2009 and July 2016, the average property in London increased in value by 94 percent, from £245,000 to £475,000, based on Land Registry data.

Since then, however, the average property in London has only risen by 9 per cent to £519,000 as of November 2024. Flats and maisonettes in the capital have risen by an average of just 3 per cent in that period.

Beveridge said: ‘In London the problem is particularly acute, with property values ​​in some areas remaining below 2016 levels, discouraging action.

‘Only a quarter of London’s sellers in 2024 had bought something in the past five years, compared to just over a third nationwide.

‘Until property prices recover, or transaction and mortgage costs fall, homeowners are likely to stay put longer.

‘Typically, homeowners have to put thousands of dollars out of their own pocket to make a move financially feasible, which often hinders many potential sales.’

Welsh sellers make the biggest gross profits

Hamptons says returns are now more evenly distributed across regions.

In 2016, 29 percent of homes selling for more than £100,000 more than the purchase price were in London, a figure that fell to 18 percent by 2024.

Meanwhile, the share of homes in the Midlands and Northern England has seen six-figure gains from 17 percent in 2016 to 29 percent in 2024.

In percentage terms, home sellers in Wales made the largest gross profit for the third consecutive year, with the average home sale in 2024 being 48 percent more than the purchase price.

Merthyr Tydfil replaced Barking and Dagenham as the local authority where sellers made the largest percentage gains nationally in 2024.

Here, the average seller received 68 percent more for his home in 2024 than he paid.

Only two London boroughs – Barking & Dagenham and Waltham Forest – were in the top 10 in 2024, compared to all 10 in the capital in 2020, 2019 and 2018.

Londoners are now as likely to make a loss as those selling a property in the North East.

In 2024, 14 percent of London sellers sold their property for less than they originally paid, the same proportion as in the North East.

In 2016, just 2 percent of London sellers sold at a loss, compared to 32 percent in the North East.

Most Londoners who sold at a loss in 2024 sold properties in central London, having bought in the past nine years.

Those selling in Tower Hamlets were most likely to sell their property for less than they paid, with 28 per cent doing so, despite the average seller in the area making a gross profit of £77,960.

Houses are doing better than apartments

Home sellers made more than double the gains recorded last year by those selling apartments.

The average home sold for 47 percent more than the purchase price in 2024, while it was owned for an average of nine years.

Meanwhile, the average apartment sold for 23 percent more after being purchased 8.8 years ago.

“Slower price growth for apartments since the pandemic means that home sellers have seen more price growth in the past five years than apartment sellers have seen in the past 10 years,” Beveridge said.

“The typical home seller who sold in 2024 after buying five years ago made a gross profit of 31 percent, compared to a profit of 30 percent for the typical home seller who bought ten years ago.

“This weaker equity growth has limited the freedom of movement of apartment owners. Only 32 percent of apartment owners who sold in 2024 moved within five years, compared to 40 percent who sold in 2019 while owning that property for the same amount of time.”