Homeowners in England and Wales typically reaped six-figure gains in 2023, when selling their properties, based on analysis by Hamptons.
2023’s home sellers, who had owned their properties for an average of nearly 9 years, enjoyed an average profit of £102,650 over their purchase price. This figure, though slightly lower than 2022’s £112,930 average, marked the second consecutive year where profits exceeded £100,000. In percentage terms, sellers in 2023 made 48% more on their sales, a modest decline from 54% in 2022. Despite these fluctuations, 93% of sellers still walked away with more money than they initially invested.
Regional Variations in Profits
The property market is as diverse as the regions it covers, and 2023 was no exception. Wales outshone London in terms of percentage gains, with Welsh homes selling for 53% more than their purchase prices, surpassing London’s 51%. This shift is attributed to Wales’ stronger price growth in recent years, a recovery phase following the 2008 financial crash.
In contrast, London’s market, particularly in Barking and Dagenham, experienced the highest percentage gains, with an average of 74%. London’s quick rebound post-2008 crisis played a significant role in these results.
London vs. the Rest
London, despite a slowdown in price growth, continued to dominate in cash terms. The average London homeowner sold for £204,190 more than their purchase price, holding the property for about 9.5 years. Kensington & Chelsea topped the list with staggering average gains of £680,580, having owned homes for around 10.8 years.
However, the North East painted a different picture. Here, sellers made the smallest gains both in cash (£40,410) and percentage terms (33%). This regional disparity highlights the nuanced nature of the UK’s housing market.
The year 2023 saw a diverse range of selling experiences. While a minority sold at a loss, an overwhelming majority, 93%, sold for more than their purchase price. The trends were influenced by various factors, including the timing of the purchase and the nature of the housing market cycle. For instance, sellers who bought in London in 2007 were more likely to profit than those in the North East, reflecting the cyclical nature of real estate values.
Dip in 2023 Gains
The decline in average gains from 2022 to 2023 can be partly attributed to minor house price falls, as indicated by the Office of National Statistics. The average sold price dropped by 2.1% in the year to November 2023, the sharpest annual fall since 2011. Additionally, a surge in sellers who had bought just two years prior contributed to this trend, suggesting a post-pandemic shift in homeowner preferences.
A Year of Strategic Selling
Despite the slight decrease in gains, 2023 remained a profitable year for most home sellers in England and Wales. The proceeds from these sales were often reinvested in the housing market, illustrating the ongoing dynamism and resilience of the property sector.