Since the start of 2015 a phenomenal 76,000 homes across the UK have smashed through the £1 million valuation barrier. This equates to more than 200 new property millionaires each and every day of 2015 according to property website Zoopla. At this moment in time around 2.2% of homes in the UK are now valued in excess of £1 million. Historically the £1 million valuation was reserved for the rich and famous but time has moved on and the UK property market is now climbing to new highs.
Which areas benefited most?
Many people will be surprised to learn that East of England saw the largest increase in property millionaires rising to just short of 49,000, an increase of 28.3% since the start of 2015. Second place was Yorkshire and the Humber with just over 3,000 property millionaires, an increase of 24.4% since the start of the year. Even the worst performing area of the English property market, the north-west of England, saw an increase in the number of property millionaires with a rise of 8.2%.
It was interesting to see the London property market showing a rise of “just” 9.8% in the number of property millionaires. However, the performance across the array of London boroughs was very volatile with some areas such as Barking and Dagenham, Newham, Redbridge and Waltham Forest seeing an increase of 55%!
The Scottish market continues to struggle
In light of the recent Scottish independence referendum it was disappointing to see a reduction in the number of property millionaires in Scotland falling from 9,308 to 8,893. This fall of 4.5% reflects the challenging economic environment in Scotland and the uncertainty caused in the run-up to the Scottish independence referendum. Indeed many in Scotland are still pushing for independence, despite of the recent no vote, which is not helping the long-term investment outlook for Scottish property.
This ongoing decoupling of the Scottish property market compared to the rest of the UK is alarming. It is something which the UK government and the Scottish government need to address as soon as possible. Even though the relationship between these two parties has been strained of late surely the Scottish economy should be the main focus?
The future of UK property
The UK economy has performed admirably during very difficult times of late and while economic growth may take some time to return to rates seen prior to the 2008 economic collapse, progress is being made. We have also seen a significant increase in the UK property market as a whole, although performances are patchy between different areas, and this is likely to continue for some time with ongoing shortages in many areas of the country.
It seems that the exclusive £1 million property club of years gone by, often reserved for the rich and famous, has fallen by the wayside and in many parts of the country a £1 million valuation means very little in social circles. So, what does 2016 hold for the UK property market and will we see yet more property millionaires created?