But the average price of homes over the £1m mark has fallen by 7% in the past two years, according to Lloyds Bank research.

  • By Nicky Burridge

    November 5, 2016 09:00
  • What’s the latest?

    The number of homes changing hands for at least £1m has soared by 12% in a year.

    A total of 6,684 properties sold for a seven-figure sum during the six months to the end of June, up from 5,946 in the same period of 2015, according to Lloyds Bank.

    The rise more than offset the 6% drop in top-end sales seen between the first half of 2014 and the first six months of 2015.

    But despite the increase, the growth rate in million-pound home sales was still lower than the jumps of 88% and 162% seen during the past five and 10 years respectively, suggesting the top-end of the property market has slowed down during the past two years.

    Why is this happening?

    High-end UK property has always been attractive to wealthy overseas investors.

    The Stamp Duty changes for second-home owners, which came into force in April this year, may also have lifted sales as people rushed to complete purchases ahead of the higher tax rate coming into force.

    Sarah Deaves, private banking director at Lloyds Bank, said: “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.

    Seven-bedroom home for sale in Nayland, Colchester.

    Who does it affect?

    Unsurprisingly, nine out of 10 £1m-plus property sales were in London, the south east and the east, with sales in the east jumping by 30% year-on-year.

    But it was the north east that saw the biggest rise in sales of homes for at least seven figures, with transactions jumping by 83%, although this was off a low base.

    At the other end of the spectrum, the number of £1m-plus homes changing hands in Scotland slumped by a third year-on-year.

    Sounds interesting. What’s the background?

    Despite recent signs of a slowdown, the prime property market has outperformed the rest of the housing market, with sales of homes costing less than £1m rising by just 2% year-on-year during the first half of 2016, compared with a 12% jump for high-end homes.

    But there has been a 7% drop in the average cost of a property in the top bracket, with the typical price paid for a home costing more than £1m falling for the past two years to £1.7m, down from just under £1.9m during the first half of 2014.

    It is partly due to a drop in sales of very expensive homes during the period, with the number of properties costing more than £5m changing hands falling by 17%.

    There was also an 8% drop in sales of £2m-plus homes.

    The reduction means that Virginia Water, in Surrey, is now the only town in Britain where the average property sells for more than £1m.

    In 2015, there were three ‘million-pound towns’, namely Virginia Water, Cobham and Beaconsfield.

    Region

    January - June 2015

    January - June 2016

    Change (%)

    Average price change (%)

    North east 11  83%  6% 
    North west  63  85  35%  1% 
    Yorkshire & The Humber  26  38  46%  -2% 
    East Midlands  32  33  3%  3% 
    West Midlands  49  61  24%  -1% 
    East of England  422  549  30%  -3% 
    London  3,938  4,238  8%  0% 
    South east  1,100  1,306  19%  -3% 
    South west  181  269  49%  3% 
    Wales  13  44%  0% 
    Scotland 120 81 -33% Not available
    Great Britain 5,946 6,684 12% Not available

    Top 3 Takeaways

    • The number of homes changing hands for at least £1m soared by 12% in a year.
    • A total of 6,684 properties sold for a seven-figure sum during the six months to the end of June, up from 5,946 in the same period of 2015.
    • The rise more than offset the 6% drop in top-end sales seen between the first half of 2014 and 2015.

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