Capital Gains Fall – recent sellers miss out on peak profits

Capital Gains Fall – recent sellers miss out on peak profits


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The amount of money sellers make from their homes has been shrinking since the market peaked in 2022, says estate agency Hamptons.  

In 2024, the average household in England & Wales sold their home for £91,820 more than they paid for it, 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.

In percentage terms, returns from property have fallen to the lowest level since at least 2015, when Hamptons records began.  Last year, the average seller in England & Wales sold their home for 42% more than they paid, down from a 48% increase in 2023.  Property gains peaked in 2016 when the average home sold for 60% more than its purchase price.  Most of these 2016 sellers bought just after the financial crash, from which house prices generally recovered quickly, particularly in the South of England.

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 less 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 last decade.  In percentage terms, the average London home sold for 44% more than its purchase price, a figure that’s been declining since peaking at 100% in 2016.

2024 seller gains by region

RegionAverage % difference between sale & purchase priceAverage £ difference between sale & purchase price% selling for more than they paidAverage years of ownership
Wales48%£66,71093%8.7
North West44%£64,83092%8.8
London44%£172,35086%9.6
East Midlands44%£71,53093%8.7
East of England42%£100,27092%8.9
West Midlands42%£72,98092%8.6
South West41%£96,09093%8.5
South East41%£116,56092%9.1
Yorkshire & the Humber40%£60,38092%8.9
North East30%£38,22086%8.0
England & Wales42%£91,82091%8.9

Source: Land Registry & Hamptons

Consequently, returns are becoming more evenly distributed across the regions.  

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.

Top 10 local authorities where 2024 sellers made the biggest % gains

RankLocal AuthorityRegionAverage % difference between sale & purchase priceAverage £ difference between sale & purchase priceYears of ownership
1MERTHYR TYDFILWales68%£59,5909.4
2SHEPWAYSouth East64%£128,50011.3
3TRAFFORDNorth West63%£146,2409.0
4BLAENAU GWENTWales62%£44,5309.1
5CITY OF NOTTINGHAMEast Midlands60%£70,2009.3
6BARKING AND DAGENHAMLondon60%£112,52010.7
7LEICESTEREast Midlands60%£84,10010.1
8RHONDDA CYNON TAFFWales60%£53,1308.5
9OLDHAMNorth West59%£64,8009.9
10WALTHAM FORESTLondon59%£178,7508.4

Source: Land Registry & Hamptons

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 (table 1).  Back in 2016, just 2% of London sellers sold at a loss, compared to 32% in the North East. 

Most of the Londoners who sold at a loss in 2024 were selling properties in Inner London, having bought within the last nine years.  Those selling in Tower Hamlets were most likely to sell their property for less than they paid, with 28% doing so, despite the average seller in the area making a £77,960 gross gain.

Given that property prices across the country have risen over the long term, those who have owned their homes the longest typically made bigger profits.  

The average homeowner in England & Wales who sold in 2024, having bought 20 years ago, saw the value of their property rise by 83%, triple the gross gain made by those who bought five years ago (27%). 

However, slower house price growth in recent years has suppressed gains.  Those who sold in 2019, having owned a home for 20 years, saw the value of their property more than treble (220%), significantly outperforming 2024 sellers who owned for the same period due to the strength of price growth in the early 2000s. 

For most of the last 20 years, increases in property values have outpaced inflation.  However, those who bought between 2005 and early 2008, just before the financial crash, are likely to have underperformed.  The average household in England & Wales who bought a home in 2007 and sold it in 2024 made a 49% gross gain.  However, inflation (measured by CPI), has risen 67% over the same period.

The trend is different in London, with London property underperforming in the short term, but outperforming longer-term.  The average Londoner who bought after 2014 and sold in 2024 has underperformed inflation and seen smaller gains than homeowners in the rest of the country.  However, those who bought pre-2013 in the capital have seen much greater returns, outpacing inflation too.  For example, the average homeowner sold their property in the capital last year for 121% more than they paid 20 years ago, outperforming the England & Wales average of 83% and inflation at 77%.

Slower house price growth in London in the medium term has limited people’s willingness and ability to move.  2024 property sellers in London have owned their property the longest, averaging 9.6 years, longer than the England & Wales average of 8.9 years.  Just 25% of 2024 London sellers had bought and sold within five years, compared to 34% of sellers across the country. 

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