House Sale Profits Exceeded £100,000 For The First Time In 2022 – Hamptons
The average long-term homeowner in England and Wales made a gross profit north of £100,000 for the first time when they sold up in 2022.
The average seller who bought a property in the last 20 years and sold up last year made a record gross profit of £108,000. That’s up from £96,220 in 2021, according to estate agent Hamptons.
A record 94% of those who sold their property in 2022 made a profit on the sale, data shows. The average seller in England and Wales also sold their home for 52% more than they initially paid for it.
The average vendor who sold in 2022 owned their property for 8.9 years, Hamptons said.
Last year a whopping 173 of local authorities saw the average homeowner make a six-figure gain when selling their home. That was up from 116 in 2021 and represents 52% of all local authorities.
The average home seller’s profits clocked in at £100,000 or above in every one of London’s local authorities, Hamptons said. And in 17 London boroughs vendor profits exceeded £200,000.
The estate agent said that “the average [London] seller sold their home in 2022 for £219,110 or 57% more than they bought it for.” The average period of ownership for sellers in the capital last year was 9.3 years.
Meanwhile, homeowners in the North East of England realised the weakest profits on average in 2022. In fact 14% of sellers made a loss on their home in 2022.
The average profit for sellers here last year came in at £37,890.
Larger Homes Lead Price Gains
Hamptons said that higher sales of larger homes drove last year’s record sales profits. It noted that “while detached homes made up 19% of sales in 2022, they accounted for 35% of properties selling for six figure gains.”
The estate agent said that detached homes on average sold for £186,940 (or 61%) more than they were originally purchased for. That was 3.3 times the average gain made on a flat.
Hamptons noted that “these larger homes have also been owned for longer and have therefore benefited from additional house price inflation, boosting the average gain.”
Soaring Prices Boost Profits
Aneisha Beveridge, Head of Research at Hamptons, said that “soaring house price growth has boosted the money homeowners have made when they sell.”
She noted that 2022’s record profits “were boosted by Covid-induced changes, with a rising share of sales coming from larger family homes that were typically bought before the financial crisis.”
Rising interest rates and the surging cost-of-living mean that house prices are unlikely to continue their march higher in 2023. Building society Halifax predicted on Friday that average residential property prices in the UK will reverse 8% this year.
But Beveridge has predicted that most sellers in 2023 will still make a gain on their purchase. She said that “even if prices do fall this year, it’s likely that over 90% of sellers will still sell at a profit.”