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2023 Property Sellers Netted Average Profit of £102,650

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    Property Owners Make Big Profits Despite Challenging Year

    2023 was characterised as a challenging year for the UK property market, but in good news for buy-to-let investors, data shows that property owners still banked big profits from selling up last year.

    This is according to new data analysis from estate agent Hamptons. The average homeowner in England and Wales who had acquired their property in the last 20 years sold it for an average of £102,650 more than they paid the second-highest figure on record.

    In percentage terms, this shows that the average seller made a 48% gain (a slight decrease from the 2022 figure of 54%). Hamptons suggests that this difference is partly due to the dip in house prices last year, as well as people moving sooner. The data backs this up, as in 2022, the average seller had possessed their property for 9 years, but in 2023, this number decreased to 8.9 years.

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      Why Are Homeowners Moving Sooner?

      There has been an uptick in homeowners moving after just two years, which has affected the overall average period before selling and brought it down to the 8.9-year figure.

      In 2023, 8% of all sellers had acquired their property in 2021. Hamptons believes this is due to a winding back of the “race for space” trend that took over during the pandemic. At that time, those who moved placed a large amount of importance on access to outside space, making the suburbs and countryside more attractive. The work-from-home shift made these moves more viable as homeowners felt more flexibility in how close to their workplace their homes had to be.

      This trend seems to have reversed as the homes sold in 2023 that were bought in 2021 were disproportionately likely to be located in the countryside or suburbs.

      So, have these homeowners lost out by moving quickly? 

      The average seller who bought their house in 2021 and sold two years later in 2023 made £56,170, or 23% more than they purchased the property for.

      Further Reading: Learn more about real estate investing for beginners or where to invest to get monthly income in the UK with our property investment guides.

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      How Can Sellers Still Make Big Profits Even Though Prices Are Falling?

      Hampton’s report shows that despite falling house prices last year, 93% of those who sold their home made a profit.

      The previous years of solid price growth have shielded property owners from the sluggish growth and modest dips that the UK property market went through in 2023, allowing them to still net a hefty profit.

      According to Hampton’s report, “the scale of historic price growth sheltered movers last year, freeing up cash to cover moving costs.”

      So, is property still a good investment?

      For those willing to wait longer term, the strong and consistent growth of the UK property market can allow for considerable capital growth despite the smaller, short-term fluctuations.

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        Which Regions Were the Biggest Winners?

        The report found some surprising shifts at a regional level in the UK housing market in 2023. For example, slower price growth in London since 2016 has led to vendors in Wales making more significant gains than those in the capital in percentage terms. However, in cash terms, Londoners continue to beat out other regions, driving, on average, a considerable profit of £204,190.

        But only 88% of sellers in London sold their home for more than they paid, compared to over 90% in most other regions, including 92% in the North West.

        The biggest winners in terms of local authorities in 2023 were Outer London suburbs and areas that have seen substantial developments and regeneration over the past 10 years, such as Bristol, Manchester and areas of Greater Manchester like Trafford, Tameside, and Oldham.

        This demonstrates the effect regeneration can have on property values in an area and underpins Greater Manchester’s popularity as a property investment hotspot in recent years.

        To learn more about some Greater Manchester buy-to-let locations, check out our guides covering investment property in Stockport and investment property in Bolton.

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        Author

        Jessica Ferris

        Jessica is a property content writer at RWinvest. Keeping a close eye on the UK property market, Jessica helps our readers stay informed and up to date on the latest market news and statistics.

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