Considerable financial boost for residential movers
In the year 2023, homeowners who chose to sell their properties realised significant capital gains, providing a considerable financial boost for their subsequent residential moves, new research shows. On average, sellers in 2023 achieved gains of £74,000, having owned their homes for around nine years.
Notably, London residents reaped the highest rewards, with average capital gains amounting to £137,000, especially among those who had been property owners for over 15 years. When it comes to the type of property sold, bungalows and detached houses led the pack, with average gains exceeding £100,000.
YIELDING THE HIGHEST CAPITAL GAINS
Despite the overall positive trend, a small fraction of home sales – merely one in ten – resulted in a loss, averaging at £17,000. The demand for detached homes saw a significant decrease of 41% in 2023, yet both detached houses and bungalows emerged as the property types yielding the highest capital gains.
Owners of smaller properties, such as terraced and semi-detached homes, experienced comparatively modest gains, which correlates with their lower market value. Flats exhibited the least growth, with only a 19% profit margin on average from sales, underscoring the sluggish price appreciation for this category over recent years. The disparity in gains across different property types highlights the nuanced dynamics of the housing market.
LONG-TERM HOMEOWNERS
The length of homeownership undeniably influences the profitability of selling a property, with longer-term owners generally securing larger returns. However, the timing of the purchase and the property’s location also play critical roles. Those who acquired properties before the 2007 financial crisis saw lesser gains compared to their counterparts who bought during the subsequent dip in average prices.
In terms of geographical variation, London stands out, with long-term homeowners typically enjoying gains upwards of £250,000. Outside the capital, the contrast is stark, with properties purchased 10-15 years post-crisis in northern England averaging gains of £63,000, while those in the south fetched around £115,000.
PROPERTY VALUE APPRECIATION
The landscape of property sales in 2023 has been marked by noteworthy capital gains, particularly for long-standing homeowners and those in prime locations like London. While the future may present a different scenario in terms of property value appreciation, understanding the current trends is crucial for making informed decisions. Should you require further information or wish to discuss the implications of these trends for your property, please do not hesitate to get in touch. Your next move could be more rewarding than you anticipate.
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