London has overtaken the North East as the region where homeowners are most likely to sell their property for less than they paid, highlighting a sharp reversal in housing market fortunes between the South and the North.
Analysis by Hamptons of Land Registry data shows that in 2025, 14.8% of London sellers made a loss on their sale, the highest proportion in England and Wales and well above the national average of 8.7%.
By contrast, the North East – which had held the unwanted top spot in nine of the past 10 years – saw 13.9% of sellers sell at a loss.
The shift marks a dramatic change over the past decade. As recently as 2019, nearly 30% of sellers in the North East sold for less than they paid, compared with just 9.2% in London, reflecting the region’s slow recovery from the financial crisis.
PRICE GROWTH
Since then, stronger price growth across much of northern England has lifted returns, while parts of the South, and London in particular, have struggled to match that momentum.
The London figures are being driven overwhelmingly by flat sales. Flats accounted for around six out of 10 transactions in the capital last year but made up nine out of 10 loss-making sales.
Nationally, flat sellers were four times more likely to sell at a loss than house sellers, with 19.9% of flat owners losing money compared with just 4.5% of those selling houses.
LONDON LOSS LEADER
At a local authority level, eight of the 10 areas where sellers were most likely to make a loss were in London.
Tower Hamlets topped the list, with 28.2% of sellers receiving less than they paid, followed by the City of London, Kensington and Chelsea, Westminster, and Hammersmith and Fulham.
In contrast, in Barking and Dagenham – the capital’s cheapest borough – just 5.3% of sellers sold at a loss.
Despite this, average London sellers still achieved a gain of £172,510, or 44.6%, reflecting the scale of historic house price growth.
However, those gains were concentrated among long-term owners: sellers who had owned their homes for more than a decade accounted for more than three-quarters of total cash gains in the capital.
HOUSES vs FLATS
The divergence between houses and flats has widened further. House prices in London rose by an average of almost 60% over roughly 10 years, compared with 35% for flats, leaving flat owners more than six times as likely to make a loss. This gap has made it increasingly difficult for flat owners to trade up to houses.
Elsewhere, sellers in the South East, South West and East of England were also among the most likely to sell for less than they paid.
KING OF THE NORTH
By contrast, all northern regions recorded higher average gains in 2025 than a year earlier.
In the North West, average prices rose by 45.4% over the period of ownership – exceeding London and all southern regions outside the capital.
Sellers in the Midlands and North now dominate the list of areas least likely to see loss-making sales.
Of the 20 local authorities with the lowest proportion of losses, only two were in the South. Harlow recorded the lowest figure nationally, with just 0.8% of sellers making a loss.
Across England and Wales as a whole, the average homeowner sold for £91,260 more than they paid, a 41% increase over an average nine-year holding period, slightly below the 2024 figure.
While the national picture remains broadly stable, the data underline a growing regional and property-type divide in housing market outcomes.
CHALLENGING MARKET
Aneisha Beveridge (main picture, inset), Head of Research at Hamptons, says: “In London, upward house price growth is no longer the one-way bet it once seemed.
“In some cases, even owners who bought a decade ago still face getting back less than they paid – something that would have been almost unthinkable in the heady days of 2015. And for many, the sums are likely to remain tight.
“Over the next few years, more sellers are likely to have missed out on London’s 2012-16 house price boom, having bought instead at what turned out to be the top of the market. That could make trading up increasingly challenging.
SHRINKING RETURNS
And she adds: “Nationally, rising gains in the North have helped offset shrinking returns in the South, leaving the overall picture broadly unchanged from last year.
“And with much of the recent price growth in the North and Midlands now baked in, it’s possible that seller gains there could outpace those in the South – in both cash and percentage terms – for the foreseeable future.
“The recent slowdown in house price growth nationally is likely to reduce the uplift homeowners achieve when they come to sell in the coming years.
“But for many, moving remains a discretionary decision, heavily influenced by the value they can achieve. If the numbers don’t stack up – and sellers risk losing part of their original deposit – many choose to stay put. This means some homeowners, particularly those unable to secure a gain, are likely to remain out of the market.”
ANALYSIS: Andrew Teacher, Co-founder at LauderTeacher
More people taking a hit on London home sales than in the North East is not surprising for several reasons.
First, there have been a raft of tax changes over the past decade and, on average, people tend to stay around a decade in a property. Stamp duty hikes particularly and the removal of Help to Buy mean today’s buyers have to shell out proportionally more than a decade ago. Today’s sales prices thus take a hit.
Second, post-Grenfell building regulations – many far tighter than needed – have put people off and pushed up the costs of construction at a time when construction cost inflation has soared by more than a third since Covid.
These regulations have also created a black hole of uncertainty that has caused some investors to stay out of London altogether while many have been put off buying high-rise flats for fear of being caught within the spiderweb of safety rules around cladding.
“The nominal deposit needed remains out of reach.”
Thirdly, whilst wage growth has slightly reduced the ration of incomes to house prices from a high of 7.5 to 5.9, the nominal deposit needed remains out of reach. In short, the on-paper affordability means nothing if people can’t afford the cash pile deposit.
Finally, and this is a long-standing trend, the North has simply become a more appealing place to live for people building careers and starting families.
SELF-FULFILLING PROPHECY
This is partly a self-fulfilling prophecy resulting from cheaper housing but it’s also got a lot to do with increasingly string employment prospects and state interventions in many Northern cities has propelled property development and employment.
Mortgage rates are likely to fall to around 3.0% by the summer which could be helpful for all buyers, but endemic problems around saving for a deposit won’t change unless further relaxations around mortgage lending occur. There’s not a huge appetite for bringing back zero parchment mortgages, however.
And with housing starts in London at an all time low and an ongoing refusal to take genuinely radical steps to make things more viable, this will not change for some time.
To be clear, the recent reduction of London affordable housing quotas from 35% to 20% (being consulted on now) will make little difference when many existing, consented schemes are bogged down by undeliverable commercial terms and when building safety regulation still clouds high-rise schemes with a smog of uncertainty, hampering cautious investors from taking a plunge against an unsettled backdrop of falling employment and falling consumer spending.
