Average profit on sale exceeds £100k for first time

According to a newly published report by Hamptons Research the gain made by property owners when they sell surged to a new record level.

Sellers in England and Wales who bought a property in the last 20 years and sold it in 2022 made an average profit of £108, 000, up from £96,000 two years earlier.

A record 94% sold their property for more than they paid for it. The average percentage gain was 52%, the average time between purchase and sale was just under 9 years.

Where the greatest gains were made

Slightly over half of local authorities saw £100k plus gains, up from around a third in 2019. 87% of these were in the south, down from 94% two years ago.

London dominates the high gain areas, with all 17 boroughs exceeding the £100k mark. Its 57% average gain was second only to Wales at 58% but, of course, the gain in cash terms was far greater due to its higher base prices. Other regions achieved gains of between 45% and 55% with the notable exception of the North East at 32%.

Detached houses achieved higher percentage gains than flats. Hamptons point out two contributing factors - firstly, detached houses were boosted by the race-for-space price surge at a time when flat prices levelled out and secondly, that the amount of time flats are held before sale is lower, leaving them less time to accrue equity.

Buy to let investors

The increase in interest rates has focused many investors' minds on immediate cash flow. Day to day margins are being squeezed, but the substantial long term capital gains show that the investment is still likely to be doing rather well. Those using a properly thought out mortgage strategy are increasing their capital gains by a multiple of between two and three.