Million pound house sales on the rise
05 November 2016
- Million pound house sales increase by 12% from the first six months of 2015 following a 6% dip in sales the previous year.
- But the average price of homes bought for more than £1 million has fallen by 7% in the past two years.
- Virginia Water is now Britain’s only ‘million pound town’.
The number of million pound house sales in Great Britain in the first half of 2016 was 12% higher than in the first six months of 2015, according to the latest research by Lloyds Bank. The increase in sales from 5,946 in H1 2015 to 6,684 in H1 2016 more than offset the 6% fall between H1 2014 and H1 2015. (Table 1)
However, the 6% increase overall between H1 2014 and H1 2016 contrasts with growth in million pound sales over the past 5 and 10 years of 88% and 162% respectively, indicating a significant slowdown over the past two years.
Nonetheless, the prime market has outperformed the rest of the market, with sales of houses under £1 million recording only a 2% rise from H1 2015 to H1 2016. (Table 2)
Despite the growth in the number of sales of million pound houses during the last year, the average price for houses sold for over £1 million has fallen for two consecutive years, from £1,862,578 (H1 2014) to £1,727,327 (H1 2016) – a fall of 7%. This can be partly attributed to a decline in sales during this period at the very top end of the market, where sales of £5 million plus homes fell by 17% and £2 million plus homes fell by 8% over the two years. (Table 5)
An additional 3% stamp duty rate for second and buy to let properties came in to effect on 1 April 2016, which may have contributed to the acceleration of sales in this period.
Virginia Water is now Britain’s only million pound town
In the first half of 2015 there were three ‘million pound towns’ in Britain – where the average price of all sales is over £1m: Virginia Water, Cobham and Beaconsfield. The recent fall in the average price of homes sold for more than a million pounds has left Virginia Water in Runnymede, as Britain’s only ‘million pound town’. The average price in Britain’s most expensive town outside London is £1,082,286.
The second most expensive town is Cobham in Surrey, where average house prices fell by 5% to £987,836 in H1 2016 – taking it just below the ‘million pound town’ status it held in H1 2015.
Sarah Deaves, Private Banking Director at Lloyds Bank, commented:
“Over the last year, there’s been an increase in the number of houses being sold for more than £1 million, but there’s also been a dip in the average house price at this level for two years in a row. 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.
“Due to a reduction in the average prices for all those homes sold for more than £1 million, Virginia Water in Surrey is now Britain’s only ‘million pound town’. In the first half of 2015, it was one of three towns with this status.”
North East has seen biggest percentage rise in million pound homes
All regions, with the exception of Scotland, saw sales of million pound houses increase between H1 2015 and H1 2016. The largest increase – albeit from a very low base – was in the North East of England with a rise of 83%, from six sales in H1 2015 to 11 in H1 2016.
In Scotland, sales of £1 million pound houses fell by a third, from 120 (H1 2015) to 81 (H1 2016).
Over 9 in 10 million pound sales are in London, South East and East of England
The significant majority of £1 million plus house sales (91%) are in London, the South East and the East of England. Of the three regions, London saw the lowest percentage rise in £1 million plus sales in H1 2016, with an increase of 8% to 4,238.
The South East had a rise in £1 million plus house sales of 19% to 1,306 in H1 2016 and sales in the East of England increased by 30% to 549.
Locations in central London are still the most expensive
London makes up the majority – nearly two in three – of all million pound house sales, with the largest national shares in Kensington & Chelsea and Westminster (both 8% of all national sales).
The only local district outside of London in the top 10 highest million pound house sales areas is Elmbridge in Surrey, with a 3% share of total transactions. (Table 3)
Outside southern England, the highest number of million pound sales were in Edinburgh (47), Trafford (31), Cheshire East (29), Stratford on Avon (16) and Harrogate (10). (Table 4)