Bombarded with headlines about rising house prices and falling affordability of homes in the capital, London homeowners often expect to make astronomical profits when selling up.
But the latest figures from Hamptons show that the era of jaw-dropping house price growth may be in the past, with the amount London sellers made on their home sale in 2024 less than half the percentage profit of 2016’s movers.
Less than a decade ago, in 2016, London sellers were doubling their money, with 100 per cent profit on average, equivalent to an average cash gain of £243,000.
In 2024 this had dropped to an average profit of 44 per cent, or £172,400.
Difference between sale and purchase price in London (Hamptons & Land Registry):
|
Seller Gain £ |
Seller Gain % |
|
|---|---|---|
|
2015 |
£226,810 |
96% |
|
2016 |
£243,050 |
100% |
|
2017 |
£240,960 |
95% |
|
2018 |
£221,350 |
83% |
|
2019 |
£202,830 |
71% |
|
2020 |
£204,210 |
63% |
|
2021 |
£203,420 |
59% |
|
2022 |
£225,590 |
58% |
|
2023 |
£204,190 |
51% |
|
2024 |
£172,350 |
44% |
London sellers saw their average gain fall below £200,000 for the first time since at least 2015. They are now as likely to sell for a loss as sellers in the North East.
Across the country, the amount of money sellers make from their homes has been shrinking since the market peaked in 2022. 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 per cent of households selling up nationwide achieved more than they paid.
Where sellers made the most from their home
Merthyr Tydfil replaced Barking and Dagenham as the local authority where sellers made the biggest percentage gains in 2024. The Welsh area had an average £60,000 difference between sale and purchase price, or a 68 per cent increase.
In the east London borough, which has the lowest average house prices in the capital, homeowners sold their homes for make 60 per cent more, equivalent to £112,500, than they bought for.
Waltham Forest was the only other London borough to appear in the top 10 list in 2024, with average seller gains of 59 per cent or £179,000.
All 10 of the highest profiting local authorities were in London in 2019 and 2020. But high transaction costs and weak house price growth mean people are not moving as often.
This is particularly true in London where just 25 per cent of 2024 London sellers had bought and sold within five years, compared to 34 per cent of sellers nationally.
In percentage terms, returns from property have fallen to the lowest level since at least 2015, when Hampton’s records began.
Property gains peaked in 2016 when the average home sold for 60 per cent 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.
Percentage difference between purchase and sale price by region (Land Registry & Hamptons):
Hamptons
Back in 2016, 29 per cent of homes that sold for over £100,000 more than the purchase price were in London, a figure that fell to 18 per cent in 2024.
Londoners selling at a loss
Londoners are now as likely to make a loss as those selling a property in the North East.
In 2024, 14 per cent 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 per cent of London sellers sold at a loss, compared to 32 per cent 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 per cent doing so, despite the average seller in the area making a £77,960 gross gain.
|
Region |
Average % difference between sale and purchase price |
Average £ difference between sale and purchase price |
% selling for more than they paid |
Average years of ownership |
|---|---|---|---|---|
|
Wales |
48% |
£66,710 |
93% |
8.7 |
|
North West |
44% |
£64,830 |
92% |
8.8 |
|
London |
44% |
£172,350 |
86% |
9.6 |
|
East Midlands |
44% |
£71,530 |
93% |
8.7 |
|
East of England |
42% |
£100,270 |
92% |
8.9 |
|
West Midlands |
42% |
£72,980 |
92% |
8.6 |
|
South West |
41% |
£96,090 |
93% |
8.5 |
|
South East |
41% |
£116,560 |
92% |
9.1 |
|
Yorkshire & the Humber |
40% |
£60,380 |
92% |
8.9 |
|
North East |
30% |
£38,220 |
86% |
8.0 |
|
England & Wales |
42% |
£91,820 |
91% |
8.9 |
How long sellers owned for to see the biggest price growth
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 per cent, triple the gross gain made by those who bought five years ago (27 per cent).
Those who sold in 2019, having owned a home for 20 years, saw the value of their property more than treble (220 per cent), 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 seen their house price growth underperform.
The average household in England & Wales who bought a home in 2007 and sold it in 2024 made a 49 per cent gross gain. However, inflation (measured by CPI), has risen 67 per cent over the same period.
Londoners who bought after 2014 saw smaller gains than the rest of the country
PA Wire
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.
The average London homeowner sold their property in the capital last year for 121 per cent more than they paid 20 years ago, outperforming the England & Wales average of 83 per cent and inflation at 77 per cent.
Slower house price growth in London in the medium term has limited people’s willingness and ability to move.
Sellers in London have owned their property the longest, averaging 9.6 years in 2024, longer than the England & Wales average of 8.9 years.
Just 25 per cent of 2024 London sellers had bought and sold within five years, compared to 34 per cent of sellers across the country.
Houses up more than flats
House sellers saw more than double the gains recorded by those selling a flat last year.
The average house sold in 2024 for 47 per cent (or £102,500) more than its purchase price, having been owned for 9.0 years. Meanwhile, the average flat sold for 23 per cent (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.
The typical house seller who sold in 2024, having bought five years ago, made a gross gain of 31 per cent, compared to a 30 per cent gain for the typical flat seller who bought 10 years ago.
This weaker equity growth has limited flat owners’ ability to move. Just 32 per cent of flat owners who sold in 2024 moved within five years, compared to 40 per cent who sold in 2019 having owned that property for the same time.
Aneisha Beveridge, head of research at Hamptons, said: “Despite slower house price growth in recent years reducing how quickly homeowners build up equity, 91 per cent 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.
Last year’s sellers generally experienced less price growth than those who sold during the pandemic. Property prices rose 43 per cent across the country between 2015 and 2024, compared to 64 per cent 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 per cent of 2024 London sellers had bought within the last five years, compared to 34 per cent 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.”