More houses selling in the UK for a million pounds and more
Million pound house sales in the UK are rising but the average price of a home in this bracket has fallen by 7% in the past two years, new research has found.
The number of million pound sales in the first half of 2016 was 12% higher than in the first six months of 2015, according to the latest research by Lloyds Bank, and this more than offset the 6% fall between the first half of 2014 and 2015.
However, the 6% increase overall between the first half of 2014 and the same period of 2016 contrasts with growth in million pound sales over the past five and 10 years of 88% and 162% respectively, indicating a significant slowdown over the past two years.
Nonetheless, the prime market has outperformed the rest of the market, with sales of houses under £1 million recording only a 2% rise from the first half of 2015 to the first half of 2016, the research also shows.
Despite the growth in the number of sales of million pound houses during the last year, the average price for houses sold for over £1 million has fallen for two consecutive years, from £1,862,578 in the first half of 2014 to £1,727,327 in the first half of 2016, a fall of 7%.
The report says that this can be partly attributed to a decline in sales during this period at the very top end of the market, where sales of £5 million plus homes fell by 17% and £2 million plus homes fell by 8% over the two years.
An additional 3% stamp duty rate for second and buy to let properties came in to effect on 01 April 2016, which may have contributed to the acceleration of sales in this period, it adds.
In the first half of 2015 there were three million pound towns in Britain where the average price of all sales is over £1 million, Virginia Water, Cobham and Beaconsfield. The recent fall in the average price of homes sold for more than a million pounds has, however, left Virginia Water in Runnymede, as Britain’s only million pound town where the average price is £1,082,286.
The second most expensive town is Cobham in Surrey, where average house prices fell by 5% to £987,836 in the first half of 2016 taking it just below the million pound town status it held in the first half of 2015.
‘Over the last year, there’s been an increase in the number of houses being sold for more than £1 million, but there’s also been a dip in the average house price at this level for two years in a row,’ said Sarah Deaves, private banking director at Lloyds Bank.
‘The strength of the London economy, stamp duty changes and the attractiveness of UK prime property to overseas buyers, could all play a part in the boost to sales at this level. Due to a reduction in the average prices for all those homes sold for more than £1 million, Virginia Water in Surrey is now Britain’s only million pound town. In the first half of 2015, it was one of three towns with this status,’ she added.
A breakdown of the figures show that all regions, with the exception of Scotland, saw sales of million pound houses increase between the first half of 2015 and the first half of 2016. The largest increase, albeit from a very low base, was in the North East of England with a rise of 83% while in Scotland sales of £1 million pound houses fell by a third.
Some 91% of million plus house sales are in London, the South East and the East of England. Of the three regions, London saw the lowest percentage rise in £1 million plus sales in in the first half of 2016 with an increase of 8% while the South East had a rise of 19% and the East of England a rise of 30%.
Locations in central London are still the most expensive with nearly two in three of all million pound house sales, with the largest national shares in Kensington and Chelsea and Westminster where both have 8% of all national sales.
The only local district outside of London in the top 10 highest million pound house sales areas is Elmbridge in Surrey, with a 3% share of total transactions. Outside southern England, the highest number of million pound sales were in Edinburgh, Trafford, Cheshire East, Stratford on Avon and Harrogate.