Sellers in England and Wales achieved an average profit of just under £100,000 from their home sales last year, representing a modest return of 40%—the lowest level in a decade, according to estate agent Hamptons.
This marks the second consecutive annual decline in cash profits, following the market’s peak in 2022, when average gains reached nearly £113,000. In 2024, the average profit dropped to £91,820.
London Sees Sharpest Decline but Remains Most Profitable
London experienced the most significant drop in cash returns, with average profits falling below £200,000 for the first time since at least 2015.
Despite this, Londoners still secured the highest average gains at £172,350, followed by sellers in the South East and East of England. By contrast, sellers in the North East saw the lowest profits, averaging £38,220.
Challenges for Sellers and Homebuyers
Aneisha Beveridge, Head of Research at Hamptons, highlighted the challenges facing homeowners looking to move up the property ladder.
“Smaller and slower equity gains over recent years, especially for flat owners, have made this increasingly difficult,” she explained.
She added that while property prices rose by 43% nationwide between 2015 and 2024, this growth pales in comparison to the 64% increase seen between 2013 and 2022, just before mortgage rates surged.
Rising mortgage rates and higher transaction costs, such as stamp duty, have further burdened households, reducing affordability and limiting mobility within the market.
Rising Losses in Property Sales
The number of sellers incurring losses on property sales rose last year, with 9% of transactions in England and Wales falling below the original purchase price.
In London, 14% of sellers sold at a loss, a figure now comparable to the North East. This is a sharp contrast to 2016 when just 2% of London sellers experienced losses compared to 32% in the North East.
Regional Winners and Losers
Merthyr Tydfil in southern Wales emerged as the top local authority for percentage gains in 2024, with sellers achieving an average return of 68%. This replaced Barking and Dagenham, which previously held the top spot.
Other high performers included Shepway in Kent and Trafford in Greater Manchester. Notably, only two London boroughs made the top 10 list in 2024, compared to all 10 spots in 2019 and 2020.
Houses Outperform Flats in Profitability
Houses continued to outperform flats in profitability. The average house sold in 2024 for 47% more than its purchase price, equating to £102,500, after an average ownership period of nine years. Meanwhile, flats sold for an average of 23% more, or £48,050, after 8.8 years of ownership.
Market Outlook
Sluggish house price growth and mounting transaction costs are discouraging frequent moves, with 34% of sellers last year owning their property for less than five years.
As the housing market grapples with these challenges, homeowners and prospective buyers alike are finding it increasingly costly to navigate the property landscape.
