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UK ends 2011 with a two tier housing market, research shows

According to property information website Zoopla 26,744 new British property millionaires were created in 2011, as demand for large homes from equity rich buyers and relatively low supply pushed up the average value of top end homes.
There are now 253,118 homes valued at more than £1 million in Britain, equivalent to one in every 108 homes. At the peak of the market in 2007, one in 97 properties were valued at over £1 million.

Despite the rise in the number of British property millionaires, the average value of a British home fell between the end of 2010 and 2011. The average British home is now valued at £221,128, 3% lower than in December 2010 when the average value was £228,658.

For properties valued at over £1 million, the average value is now £1,688,379 compared to £1,657,858 at the end of 2010, a rise of 2%, the research also shows.

The biggest rise in the number of property millionaires was in London, where numbers grew 18% over the past year. Four in five homes worth over £1 million in Britain are located in London and the South East, with London accounting for over half the national total at 55%. London is also home to nine of the top ten areas in Britain with the highest proportion of homes that are valued at over £1 million, led by Kensington, where more than half, 56%,of all homes are worth more than £1 million.

The only area outside London making the top ten was Virginia Water in Surrey where 30% of homes are worth £1 million or more.

‘This data shows clearly how differently the top end of the market is performing from mainstream Britain,’ said Nick Leeming of Zoopla.

‘Whilst most of the market is suffering from the impact of inflation, stagnant wage growth, the inability to secure mortgage finance and nervousness about the future of the economy, at the upper end of the market, cash and equity rich buyers are enjoying some of the lowest mortgage rates in recent history. And strong demand from overseas buyers has boosted prices for homes in the capital,’ he added.