- HOME SELLERS MADE £110,000 PROFIT DURING PANDEMIC PRICE BOOM
HOME SELLERS MADE £110,000 PROFIT DURING PANDEMIC PRICE BOOM
The average home seller made a profit of £110,000 during the pandemic as the as the stamp duty holiday and race for space drove house prices up to record highs.
This was £15,587 more than if they had sold a year earlier, before the pandemic, according to analysis by Savills estate agents. Sellers in the South East made the largest gains at £141,538, £18,739 more than had they sold in 2019.
The data looked at sales between May 2020 and 2021.
People selling detached homes made profits of £166,586 – 56pc more than they paid for their property and £22,588 more than they would have received before the pandemic. Sellers of flats, however, saw profits increase by just £950.
Savills analysed sales of properties in England and Wales that were purchased within the past 25 years by matching Land Registry sales with the point of purchase.
The strongest activity was among those selling three to seven years after they bought. These homeowners, likely to be moving up from the first rungs of the housing ladder, accounted for nearly two fifths (38.3pc) of transactions.
This reflected the rush to move to larger properties, with gardens and extra Bedrooms for home offices. Sellers made an average profit of £54,310.
The post-pandemic housing market has strongly favoured upsizers who already have a stake in property and have been able to benefit from recent house price rises, They are also more likely to have the larger deposits to access record low mortgage rates.
The average home seller in the year to May made £110,000 in profit
Lucian Cook, of Savills, said: “An increase in the numbers of people moving around the five-year period of ownership reflects how demand has been driven by those looking to trade up the ladder, taking advantage of the low-interest rates.”
Sellers who purchased during the last housing market trough in 2009 made profits of £144,076. They made more money than any seller who purchased during the five years leading up to the crash.
Movers who sold in London after buying in 2009 made more money than in any other region, but this reflected both higher prices and price growth before the pandemic. The year-on-year increase in profit in London was actually the smallest in the country as demand during the pandemic has been muted.
The average London seller made a profit of £244,903 in the year to May, but this was just £5,301 more than if they had sold a year earlier.
In the South West, which saw a rush of buyers from London in the wake of lockdown, the year-on-year difference was 3.5 times higher. The average seller made a £106,703 profit, £18,605 than if they had sold a year earlier.
Mr Cook added: “London sellers have been significant drivers of demand in the regional housing markets over the past year.
“While they have taken advantage of housing wealth they’ve accumulated over a number of years but had to remain realistic about the how much their home was worth as demand shifted away from the capital.”
Savills recently upgraded its 2021 UK house price forecasts to 9pc, followed by 3.5pc in 2022.