Sellers hit as house price gains reach record low
House price gains when selling a property have dropped from their 2022 peak and are now at record lows in percentage terms.
New research suggests the average household in England & Wales sold their home for £91,820 more than they paid for it in 2024, 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.
Despite lower price gains last year, 91% of households selling up nationwide achieved more than they paid, according to the research by Hamptons.
Last year, the average seller in England & Wales sold their home for 42% more than they paid, down from a 48% increase in 2023.
In percentage terms, returns from property have fallen to the lowest level since at least 2015, the agent said.
There were, of course, regional variations.
Sellers in every region of the country saw their returns fall between 2023 and 2024.
However, Londoners recorded the biggest decrease in cash terms. The average 2024 seller in London saw the value of their property rise by £172,350 since purchase, £31,840 lower than those who sold in 2023.
This marked the first time that property gains in the capital have fallen below £200,000 since at least 2015. This has been mainly driven by slower house price growth in London over the past decade. In percentage terms, the average London home sold for 44% more than its purchase price, Hamptons said, a figure that’s been declining since peaking at 100% in 2016.
Back in 2016, 29% of homes that sold for over £100,000 more than the purchase price were in London, a figure that fell to 18% in 2024. Meanwhile, the share of homes making six-figure gains that were located in the Midlands and North of England has risen from 17% in 2016 to 29% in 2024.
In percentage terms, for the third consecutive year, house sellers in Wales made the biggest gross gains, with the average home selling in 2024 for 48% more than the purchase price.
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.
Londoners are now equally as likely to make a loss as those selling a property in the North East. In 2024, 14% of London sellers sold their property for less than they originally paid, the same share as in the North East. Back in 2016, just 2% of London sellers sold at a loss, compared to 32% in the North East.
House sellers saw more than double the gains recorded by those selling a flat last year. The average house sold in 2024 for 47% (or £102,500) more than its purchase price, having been owned for 9.0 years.
Meanwhile, the average flat sold for 23% (or £48,050) more, having been bought 8.8 years ago.
Slower price growth for flats since the pandemic means that house sellers saw more price growth over the last five years than flat sellers saw in the last 10 years, according to the research.
The typical house seller who sold in 2024, having bought five years ago, made a gross gain of 31%, compared with a 30% gain for the typical flat seller who bought 10 years ago.
This weaker equity growth has limited flat owners’ ability to move. Just 32% of flat owners who sold in 2024 moved within five years, compared to 40% who sold in 2019 having owned that property for the same time.
Sellers hit as house price gains reach record low
Aneisha Beveridge, head of research at Hamptons, said:
“Despite slower house price growth in recent years reducing how quickly homeowners build up equity, 91% of sellers still sold their homes for more than they paid, with nearly a third making six-figure gains. These proceeds typically fuel moves up the property ladder. However, smaller and slower equity gains over recent years, particularly for flat owners, has made this more challenging.
“2024 sellers generally experienced less price growth than those who sold during the pandemic. Property prices rose 43% across the country between 2015 and 2024, compared to 64% between 2013 and 2022, just before mortgage rates spiked. On top of this, households have had to grapple with higher mortgage and transaction costs, such as stamp duty, making it more costly to move.
“In London, the issue is particularly acute, with property values in some areas remaining below 2016 levels, discouraging moves. Only 25% of 2024 London sellers had bought within the last five years, compared to 34% nationwide. Until property prices recover, or transaction and mortgage costs decrease, homeowners are likely to stay put for longer. Usually, homeowners need to inject thousands of pounds from their own pocket to make a move financially viable, which often scuppers many potential sales.”
Kindly shared by Estate Agent Today
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