The luxury market has outperformed the rest of the sector, despite a 1% fall in £1m property sales overall, according to Lloyds Bank.
What’s the latest?
Northern England has seen a sharp rise in homes selling for at least £1m, but prime property sales have fallen in other parts of the country.
The number of homes changing hands for a seven-figure sum soared by 55% in the north west and 45% in Yorkshire and the Humber during the first six months of 2017, in contrast to the same period in 2016.
But in London, homes changing hands for at least £1m actually fell by 7% during the same period, while Scotland experienced a 35% slump.
The number of prime properties sold across Great Britain as a whole also dipped by 1% to 6,613, according to Lloyds Bank.Above: Priced at £1.05m in Nantwich, Cheshire, this five-bedroom Tudor building is a former restaurant
Why is this happening?
The drop in £1m-plus home transactions is likely to have been driven largely by price falls at the top end of the market.
The typical cost of a high-end property has declined for three consecutive years, dropping from an average of £1.9m in mid-2014 to £1.7m in mid-2017.
A number of factors have contributed to the fall, including stamp duty changes, economic uncertainty and the threat of rising interest rates.
Property market trends tend to start in London and ripple out across the rest of the country, which may explain why top end sales are down in the capital, but still buoyant in northern regions.
Who does it affect?
While the average homeowner may think homes changing hands for seven-figure sums has very little to do with them, the property market is interconnected.
The current slowdown in London began at the top end of the market following the change to stamp duty charges for second homes introduced in April 2016.
A lack of activity high up the property ladder has a knock-on effect lower down it, as those trading up are unable to find properties to buy, deterring them from putting their own homes on the market.Above: A two-bedroom flat is for sale in this luxury penthouse apartment, with views over the River Mersey, Liverpool, for £1.2m
Sounds interesting. What’s the background?
Despite seeing a 7% fall in the sale of £1m homes, London continued to account for the majority of these transactions at 60%, followed by the south east at 23%.
Scotland saw the biggest drop in high-end sales at 35%, while Wales recorded a 31% decline.
But in both cases, the low level of transactions makes percentage changes volatile, with only nine homes valued at £1m-plus changing hands in Wales during the six months.
Sales of seven-figure homes also fell in the East Midlands and east of England, dropping by 27% and 4% respectively.
While the north west and Yorkshire and the Humber saw the biggest increase in £1m-plus sales, the West Midlands recorded a 33% increase, and transaction volumes were up by 18% in the north east, 15% in the south east and 5% in the south west.
However, despite the 1% fall in £1m property sales overall, the luxury market has still outperformed the rest of the property sector, according to Lloyds. The bank said the, "modest drop is in stark contrast to the 7% decrease in house sales costing under £1m".
Million-pound property sales, 2016-2017 (comparing first half):
Source: Land Registry, Registers of Scotland
Top 3 takeaways
- Northern England has seen a sharp rise in the number of homes selling for at least £1m
- £1m-plus home sales soared by 55% in the North West and 45% in Yorkshire and the Humber during the first six months of 2017
- But sales of £1m homes fell by 7% in London and 35% in Scotland
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