Million Pound Home Sales Rise at Fastest Rate Since 2006

LONDON, ENGLAND, May 05, 2011 (Press-News.org) The number of million pound property sales in 2010 increased at the fastest rate for four years, according to research by Lloyds TSB. There were 7,185 million pound property sales in Great Britain in 2010: 54% higher than in 2009. This is the largest annual increase since 2006 (62%) and suggests a real resurgence at the very top end of the mortgage market. In total, there are now an estimated 184,0001 homes in Britain worth at least one million pounds.

Despite this significant increase, million pound property sales remain 13% below the levels they reached before the onset of the financial crisis in 2007 (8,216), following a sizable 43% decline in sales between 2007 and 2009. These figures underline the fact the upper end of the market was significantly affected by the financial crisis - which impacted people looking for the best mortgages deals at all levels.

Million pound property sales outperform the rest of the market
Sales of million pound properties rose significantly more than total housing transactions in 2010. The 54% increase in million pound home sales in 2010 was nine times the overall increase in sales (6%). In contrast, there was a 1% fall in the number of sales worth less than GBP250,000. Despite this outperformance, million pound sales continue to represent a very small proportion of the total market, accounting for just 1% of all sales in Britain in 2010.

West Midlands sees largest rise in million pound sales
The geographical distribution of million pound home sales also reflects the wider north-south divide in the housing market with London and the South East accounting for 83% of all million pound sales in Great Britain in 2010. Nonetheless, there are signs of substantial growth elsewhere: the West Midlands recorded the biggest percentage increase in million pound sales (109%), followed by the East of England (62%), while London also saw a marked rise (56%).

Wales (-25%) and the North East (-19%) were the only regions to see a fall in million pound sales, although the total number of million pound sales in both areas is very low.

Substantial increase in multi-million pound home sales
There were 1,420 sales of properties costing at least two million pounds in 2010; 62% higher than in 2009 (878). Three quarters of all two million pound plus sales were in London (1,051). The number of five million pound properties sales rose by 79% from 70 in 2009 to 125 in 2010.

Suren Thiru, Lloyds TSB Housing Economist, said: "The number of properties sold for over GBP1 million has risen substantially over the past year, reflecting the strength of the very top end of the housing market. A small number of areas in London still account for the lion's share of all GBP1 million sales, with housing market activity in such locations continuing to benefit from strong demand from wealthy international buyers and limited supply. In contrast, the level of activity across the wider housing market remains subdued."

ADDITIONAL FINDINGS:

Million pound property sales by local authority district:
- 64% of the 380 local authority districts tracked saw at least one sale of over a million pounds in 2010.
- Kensington & Chelsea and Westminster accounted for nearly a quarter (22%) of all the million pound homes sold in 2010 with 868 sales.
- Elmbridge in Surrey had the highest number of million pound sales outside London (268).
- Edinburgh saw the most million pound property sales outside southern England with 70 sales in 2010.

Million pound property sales and stamp duty:
- An extra GBP10,000 will be added to the total stamp duty bill for someone paying GBP1 million for a home as a consequence of last month's increase in the stamp duty rate from 4% to 5% for homes worth over GBP1 million.

EDITORS' NOTES:

1Based on the assumption that the proportion of sales is representative of the entire owner occupied housing stock.

Property purchases of at least one million pounds are more likely to have been paid for in cash or with a small mortgage compared to the rest of the housing market. Figures from the Council of Mortgage Lenders show that in January 2011, nearly 40% of all buyers did not need a loan to buy their home. This figure is likely to be much higher at the very top end of the housing market.

"This report is prepared from information that we believe is collated with care, however, it is only intended to highlight issues and it is not intended to be comprehensive. We reserve the right to vary our methodology and to edit or discontinue/withdraw this, or any other report. Any use of this report for an individual's own or third party commercial purposes is done entirely at the risk of the person making such use and solely the responsibility of the person or persons making such reliance. Lloyds TSB all rights reserved 2011"

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