Recent research conducted by Hamptons has shed light on the property market, revealing that despite a dip in house prices, the majority of homeowners who sold their properties last year enjoyed significant financial gains.
The study indicates that homeowners in England and Wales who bought their homes in the past two decades and sold them in 2023, on average, earned a profit of £102,650, marking a 48% increase over their initial purchase price. Although this figure represents a decrease from the record high of £112,930 in 2022, a substantial 93% of sellers still managed to sell their homes for more than their purchase price.
The report highlights a shift in regional profit trends, noting that due to a slowdown in house price growth in London in recent years, sellers in Wales are now making greater percentage gains compared to their counterparts in the capital. Despite the overall decline in profits, 2023’s average gain remains the second-highest on record, with sellers collectively realizing a staggering £103 billion increase in value compared to their original purchase prices.
Aneisha Beveridge, Head of Research at Hamptons, commented on the findings, stating, “Despite falling house prices last year, 93% of households still sold their home for more than they paid, netting themselves just over £100k on average. These proceeds are mostly reinvested back into the housing market and go towards the purchase of another home, so they’re rarely realised in cash terms. However, the numbers illustrate how the scale of historic price growth sheltered movers last year, freeing up cash to cover moving costs.”
Beveridge also shed light on the changing dynamics of the housing market post-Covid, observing that double-digit price increases have enabled households, even those moving within a short two-year span, to sell their properties at a profit. This trend, she notes, often involves sellers offloading larger homes in rural areas to return to suburban or city locales, indicating a reversal of the “race for space” phenomenon observed during the pandemic.
This comprehensive report from Hamptons offers a detailed overview of the current state of the property market, highlighting the enduring profitability of property investments despite recent price fluctuations and changing market trends.