One in three homes sold above the asking price last year

It's been a sellers' market during the pandemic, with soaring house price growth, a shortage of properties for sale and buyers forced to compete to secure the home they want.

In fact, nearly one-third of homes in England and Wales sold for more than their asking price in 2021, according to figures from estate agency Hamptons.

The 'race for space' triggered by lockdowns and the shift to home working, together with low mortgage rates and the temporary stamp duty holiday, contributed to the clamour in the market.

A record 31% of homes went for more than the seller had asked for, compared with an average 16.1% in the 10 years to 2020, the Financial Times reports.

Homes have also been selling quickly throughout the pandemic. According to Hamptons it took on average 31 days for a property to go under offer in 2021 and just 19 days the year before, compared with 61 days in 2009.

The Nationwide House Price Index at the end of the year revealed that 2021 was the strongest year for house price growth since 2006. The price of a typical UK home hit a record high of £254,822, up nearly £24,000 over the year, with prices now 16% higher than before the pandemic struck in early 2020.

Separate data from Hamptons shows how the rapid rise in house prices has driven up the amount of money homeowners make when they sell.

Sellers in England and Wales who bought their property within the last 20 years and sold in 2021 made an average gain of £95,360 (46%) on what they originally paid for their home, up from £83,550 in 2020.

A record 92% of sellers sold their property in 2021 for more than they bought it, having owned their home for an average of 8.8 years.

However, most of these gains are not seen by sellers as they are reinvested back into the housing market when they make their next purchase, Hamptons noted.

The rise in seller profit last year was boosted by the sale of bigger homes, which have typically been owned for longer and therefore benefited from more price growth. Meanwhile, flat owners were least likely to sell their home for more than they bought it for, partly because they tend to own the property for a shorter period. One in five (19%) flat sellers in 2021 made a loss compared to just 4% of those selling a detached house.

With property prices in London typically higher than elsewhere in the country, sellers in the capital continued to make the biggest absolute gross profit at an average £197,730. However, weaker house price growth over the last six years meant that 2021 marked the first time since 2015, when Hamptons started collecting the data, that the average London seller made a gain of less than £200,000.

The outlook for sales in the early part of this year appears positive, as long as sufficient numbers of properties are put on the market, the estate agency said.

"All eyes are fixed on whether stock levels begin to rise. This may start to turn the tables in favour of buyers, rather than sellers."