(Jan 13): UK home sellers made the lowest profit in more than a decade last year as high interest rates and a cost-of-living squeeze sapped demand.

The average gross profit on a sale in England and Wales was £91,820 (US$112,929 or RM504,971) in 2024, or 42%, according to a report from broker Hamptons International. That represents a drop of 11% from £102,650 a year earlier, showing how discounts hurt earnings.

“Households have had to grapple with higher mortgage and transaction costs, such as stamp duty, making it more costly to move,” said Aneisha Beveridge, head of research at Hamptons. “Until property prices recover, or transaction and mortgage costs decrease, homeowners are likely to stay put for longer.”

The UK’s housing market endured a challenging 2024, as higher mortgage rates reduced competition for homes and restricted sellers’ ability to hike asking prices. A pullback in rate-cut bets pushed the five-year swap rate to the highest level since May last week, raising the prospect that home loan costs are going to increase again.

The average seller in England and Wales saw gains slip from 48% in 2023, Hamptons said. The decline was most pronounced in London, where high transaction costs and weak house price growth mean people aren’t moving as often.

Only 25% of home sellers in London had bought and sold within five years in 2024, compared to 34% of vendors nationally. The average London seller made a £172,350 gain last year, roughly £32,000 less than in 2023, marking the first time profits have fallen below £200,000 in the capital for at least nine years.

Regardless, 91% of households in England and Wales sold their home for a profit in 2024, with nearly a third making six-figure gains. A separate Hamptons report published in November predicted house prices to rise by 3% across Britain this year, followed by 3.5% growth in 2026.

Those gains would be partly driven by a long-term slump in housebuilding, which is squeezing supply and keeping prices elevated. That’s making it more difficult for prospective buyers to get on the housing ladder, pushing more Britons into renting.

“Homeowners need to inject thousands of pounds from their own pocket to make a move financially viable,” Hamptons’ Beveridge said. This “often scuppers many potential sales,” she added.

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