Sales of million pound homes in the UK have fallen for the first time in two years but the very top end of the market remains strong as multi-million pound home sales hit historic highs, research shows.
The number of properties selling for over one million pounds declined in 2011 but sales of homes worth more than two million pounds continued to grow, according to a report out today (Friday 27 April) from Lloyds TSB.
The total number of sales of properties that cost at least one million pounds in Great Britain was 5% lower in 2011 than in 2010. This compares with a 55% increase in 2010 and was the first annual fall in million pound sales since 2009. In total, there are an estimated 165,000 homes in Britain worth at least one million pounds.
However, multi million pound property sales rose to their highest level on record in 2011. There were 1,518 property sales worth at least two million pounds in 2011, a rise of 5% from 1,442 sales in 2010. This is the highest number of sales, in this price bracket, since records began in 1995. Sales of properties topping the two million pound mark were also 2% higher in 2011 than at the peak of the housing market in 2007.
In addition, the number of properties selling for over five million rose by 22% from 128 in 2010 to 156 in 2011, providing further evidence of the strength of sales at the very top end of the market.
Over three-quarters, 76%, of all two million pound plus sales in 2011 were in London and more than half of all multi million pound sales took place in the three boroughs of Kensington and Chelsea, Westminster and Camden.
Despite the increase in sales, Lloyds TSB estimates that only 0.2%, 38,000, of all homes in Britain are worth at least two million pounds and, therefore, potentially subject to the new 7% stamp duty rate. Even in London, multi-million pound sales account for only 1.3% of all properties.
‘The rise in the number of multi million pound property sales over the past year compares to the weakening picture across the rest of the market, highlighting the strength at the very top end of the housing market. Continued demand from wealthy cash rich buyers, both from the UK and overseas, as well as limited supply has meant that this segment of the market remains largely immune from the headwinds facing the vast majority of homebuyers,’ said Suren Thiru, Lloyds TSB housing economist.
The report also shows that eight out of the eleven regions recorded a fall in million pound sales in 2011. The West Midlands saw the biggest drop in million pound sales, down 35%, followed by the North West down 20%. London saw a slight fall of 0.3%.
Wales saw a 117% increase in million pound sales and in the North East they were up 15% and up 14% in the East Midlands, the only regions to see a rise in million pound sales, although these increases were from a very low base.
Nine of the ten local authority districts (LADs) that recorded the highest number of million pound sales in 2011 are in London. Outside London and the South East of England, St Albans in East of England recorded the highest number of million pound sales in 2011 with 73, followed by Edinburgh with 61 and Poole with 38.
The recent increase in the stamp duty rate for homes purchased for more than two million pounds from 5% to 7% has resulted in a 40% rise in the average stamp duty bill for purchasers of such properties.