Property sellers in England and Wales have made their lowest return in a decade. Cash profit on a sale fell for the second year in a row, to below £100,000, Hamptons has found. On average, homeowners who sold last year compared to 2022 made more than £20,000 less profit.
Aneisha Beveridge, the head of research at Hamptons, said that profits on the sale of properties typically funded a step up the property ladder but “smaller and slower equity gains over recent years, particularly for flat owners, had made this more challenging”.
Beveridge added that last year: “Sellers generally experienced less price growth than those who sold during the coronavirus pandemic. Property prices rose 43% across the country between 2015 and 2024, compared with 64% between 2013 and 2022, just before mortgage rates spiked.
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“On top of this, households have had to grapple with higher mortgage and transaction costs, such as stamp duty, making it more costly to move.” Mortgage brokers “steered” homeowners towards short-term home loans which carried a risk of higher interest rates, according to the Bank of England.
A working paper by Bank staff Marcus Buckmann and Peter Eccles, which reviewed over 2.2m mortgages, found that during this period “brokers steered households” towards shorter mortgages “to earn fees more often”.
They added: “Households who choose a mortgage with a shorter fixed term are more exposed to risks affecting mortgage rates, in particular the future base rate.” And they warned: “An increase in the share of mortgages with a short fixed-term transfers risks concerning the future level of the base rate from lenders to households, who are less able to hedge against and manage these risks.”
JLM Mortgage Network group director Sebastian Murphy defended brokers, saying: “What the report fails to mention is that the reason why brokers were placing many mortgage customers on two-year fixes during those years was that rates, in general, were falling but had not yet reached a floor.
“Why would you recommend a five-year fix, for example, at a higher rate when you believed rates would continue to fall – as they indeed did.”