Homeowners who sold in 2023 made generous capital gains

Homeowners who sold their property in 2023 made an average gain of £74,000, according to data from property portal Zoopla.

Zoopla analysed Land Registry entries from the past 12 months to calculate the typical gross profit from property sales in England and Wales.

It also found that nine out of 10 (93 per cent) of those that sold their home last year, sold at a price above the original purchase price.

The figures come despite a fall in house prices throughout the UK in 2023 and mean that just one in 10 homes sold made a loss at an average of £17,000.

With demand for detached homes down 41 per cent in 2023, it is surprising that both detached houses and bungalows are the property types with the greatest capital gains.

Detached homes made £137,000 or £18,000 per year, on average.

Bungalows were close behind, making an average of £102,000 or £13,300 per year for owners.

However, homeowners with smaller properties such as terraced and semi-detached homes made smaller gains, in line with the lower value of each home.

This is echoed with flats which made just 19 per cent between sales on average as a result of slower price growth for this property type over recent years.

It is no surprise that those who have been in their home longer, hit the largest prices when selling their home.

However, it’s not just length of home ownership that has an impact on how much is to be made from a property, but also when it was purchased and where it is.

For example, those who bought before the 2007 financial crash saw smaller gains compared to those who bought a property after, when average prices fell.

Monetary gains are also linked to the average value of homes in the area, which means that the biggest winners are sellers in London who have lived in their homes for over 15 years, typically making over £250,000 between sales.

Outside London, the winners were those who bought a home 10 to 15 years ago, after the 2007 financial crisis, with average gains ranging from £63,000 to be made in northern England versus £115,000 in the south of England.

Izabella Lubowiecka, senior property researcher at Zoopla, says: “Most homeowners who sold in 2023 made meaningful capital gains which, for many, will have provided important financial support for their next home move.

“It’s positive news, considering house prices posted modest price falls for the first time in 11 years.

“Lower levels of house price growth mean potential gains in future are unlikely to be as strong as in the past which is why more households are looking further to find their new home and seek better value for money.”