Average profit on house sales jumped 12% to more than £100,000 in 2022, with houses in Wales making the largest percentage returns
- Typical seller netted £100,000 in gross profit on sale of their home last year
- Despite house price slowdown, 94% of sellers sold for more than they bought for
- Welsh property sellers made higher percentage profits than Londoners
The average home seller in England and Wales made a gross profit of over £100,000 from their house in 2022, setting a new record.
In 2021, sellers who had bought their home in the last 20 years made £96,220 on average when they sold, 12 per cent less than last year when the average gain was £108,000, according to Hamptons.
The increase in profit has been driven by the sale of bigger homes, the estate agency said. Detached homes comprised 19 per cent of house sales in 2022 and 35 per cent of the properties making six figure profits for sellers.
Cashing in: Covid-era gains to house prices have resulted in record profit for sellers in 2022
Despite the slowdown in the property market towards the end of the year, 94 per cent of sellers last year sold their houses for more than they bought them for.
House prices fell 1.5 per cent in December taking the average to £281,272, down from £285,425, according to Halifax’s latest house price index.
Regionally 84 per cent of the local authorities that saw the average homeowner make over £100,000 from their property sale were in the south of England.
>> Read our round up of the property market predictions for the year ahead
Sellers are now seeing six-figure profits from their house sales in 52 per cent of local authorities, but London was the only region where the average household gain exceeded £100,000 in every local authority during 2022.
However, due to slower price growth in London, Welsh sellers are now making bigger percentage gains on their house sales than Londoners.
In cash terms, sellers in Kensington & Chelsea in the capital saw the biggest gains of any local authority, with the average household selling their home for £684,510 more than they paid for it an average of 10.4 years ago
At the other end of the scale, properties sold in the North East saw an average gain of £37,890. The area had no local authorities with average gains above £100,000.
Slow house price growth since the 2008/2009 financial crash meant 14 per cent of sellers made a loss on their property, says Hamptons.
Commenting, Aneisha Beveridge, Head of Research at Hamptons, said: ‘2022’s record breaking gains 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.
‘However, most of these profits are never seen by sellers as they are reinvested back into the housing market when they make their next purchase which has also increased in value.
‘While there are a number of uncertainties weighing on the market, even if prices do fall this year, it’s likely that over 90 per cent of sellers will still sell at a profit. The other 10 per cent will mostly be flat owners who bought in the last five or so years.
‘The shift away from recent mortgaged homeowners selling cheaper homes towards older, more affluent homeowners selling more expensive homes also looks set to push up gains among sellers again this year.’
What to do if you need a mortgage
Borrowers who need to find a mortgage because their current fixed rate deal is coming to an end, or because they have agreed a house purchase, should explore their options as soon as possible.
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What if I need to remortgage?
Borrowers should compare rates and speak to a mortgage broker and be prepared to act to secure a rate.
Anyone with a fixed rate deal ending within the next six to nine months, should look into how much it would cost them to remortgage now – and consider locking into a new deal.
Most mortgage deals allow fees to be added the loan and they are then only charged when it is taken out. By doing this, borrowers can secure a rate without paying expensive arrangement fees.
What if I am buying a home?
Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be.
Home buyers should beware overstretching themselves and be prepared for the possibility that house prices may fall from their current high levels, due to higher mortgage rates limiting people’s borrowing ability.
How to compare mortgage costs
The best way to compare mortgage costs and find the right deal for you is to speak to a good broker.
You can use our best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.
Be aware that rates can change quickly, however, and so the advice is that if you need a mortgage to compare rates and then speak to a broker as soon as possible, so they can help you find the right mortgage for you.
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