When you own your home, you have a valuable asset that could make you significant profits if you play your cards right. With house prices at an all-time high and inflation showing no signs of calming, many homeowners are wondering if now is the best time to sell their homes.
Well, if there is something to buy in 2021, 2022 could be a great year for sellers. Here is everything you need to know about selling a home in 2021 and why it might be wise to think about selling in the year ahead.
How Much Did the Average Home Seller Make in 2021?
A recent report from Hamptons found that the average home seller made £ 95,000 in 2021. That figure shows an increase in profits in 2020, which averaged £ 83,550 per home sold.
In addition, single family homes in the UK made even higher profits of £ 151,840 per home. These numbers represent homeowners who have bought their home in the past 20 years. In fact, in 2021, 64% of sellers had bought their homes in the past 10 years.
Unsurprisingly, the biggest increases in home sellers were in London. However, 2021 was the first year sellers in the capital made gross profits of less than £ 200,000. This was due to weaker price growth in the region.
Was this all good news for sellers in 2021?
While home sellers made sizeable profits last year, those who sold homes did not make the same profits. Profits from the sale of an apartment fell from a record high in 2020 to just £ 54,690. In addition, 19% of homeowners made a loss on their property in 2021. One of the reasons for this is that home sellers tend to own their homes for a shorter period of time, with an average of just 8.2 years.
Should You Sell Your Home in 2022?
The rise in house prices was one of the main reasons sellers made significant profits in 2021. House price growth was unabated during the pandemic and shows no signs of slowing anytime soon.
Because of this, 2022 could be a good time to sell your home. In fact, it may be wise to sell before home prices inevitably fall, interest rates rise, or buyers’ demand fades. However, selling in 2022 may not be the best option for everyone. Here are some things to consider before selling in the coming year.
Have you recently refinanced and received lower mortgage rates?
If you recently refinanced your home, you might have one low mortgage rate. This low rate could help keep your finances in check and make your everyday life easier.
If your mortgage rate is currently below average, it may be worth holding onto your home for now. Buying a new property in the current market could earn you a higher interest rate that could outweigh the benefits of selling your current home.
How easy will it be to find a new home?
Selling your home is only attractive if you can easily find a new home to replace. Unfortunately, the housing supply in 2022 is low compared to consumer demand. Hence, buying a new home can be difficult for you and your family.
For those willing to wait for new properties to hit the market, this is not a problem. However, families with children and the elderly may want to wait for the housing supply to rise before selling their homes.
How long have you owned your house?
The Hamptons report shows that the best profits are made by homeowners who have owned their property for 10 years or more. On the other hand, homeowners who only kept their property for an average of 8.2 years are more likely to lose money through the sale.
Hence, hold back from selling your home if you have only held it for a short period of time. Typically, the longer you hold your house, the greater the profits.
Was this article helpful?
Some of the offers on The Motley Fool UK website come from our partners – this is how we make money and keep this website going. But does that affect our ratings? Lower Austria. Our commitment is to you. If a product is not good it will be reflected in our rating or we will not list it at all. While we strive to offer the best products available, we don’t review every product on the market. Find out more here. The statements above are those of The Motley Fool alone and are not provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard and Tesco.