Over half of £1m+ property purchases set to be outside capital
More than half of properties over £1m are set to take place outside Greater London this year for the first time on record.
Analysis of land registry data for England and Wales shows a 195% rise in residential transactions valued over £1m and over between 2011 and 2016.
The new study by Private Finance suggests the volume of £1m purchases grew nearly four times as fast as the overall market.
Shaun Church, director at Private Finance, said: “Buying a million pound-plus property is a significant financial commitment.
“With increasing numbers of buyers falling into this category, borrowers may need to look to private banks and brokers to ensure they are able to access appropriate mortgage finance.”
This data is surprising considering historically, the majority of £1m plus transactions have taken place in Greater London which saw a 63% share of the higher-end market in 2011.
The average loan-to-value was 54% between 2011 and 2016 rising to 56% last year according to the Private Finance statistics.
Between July and December 2016 there were also falls in average mortgage rates, with Private Finance’s best buy 3-year fixed rate mortgage falling from 1.76% to 1.49%, whilst the best buy 5-year fixed rate mortgage fell from 1.99% to 1.83%.
Church added: “Borrowers at the upper end of the market in particular stand to make significant savings by finding a competitive mortgage deal.
“When you have a six-figure loan, slightly lower rates can wipe thousands off the annual interest paid. Today’s low-rate environment puts borrowers in a strong position, and those buying £1m plus properties are reducing costs as much as possible by contributing hefty deposits.”
However between 2015 and 2016, the growth of £1m plus purchases in Greater London was outpaced by areas such as Hertfordshire, Surrey and Kent.
Church concludes: “Sustained house price growth in London means that even for many highly-paid professionals, a large family home in the capital is now out of reach.
“With buyers looking further afield as a result, this has contributed to significant growth in the number of million pound-plus transactions in areas like Kent, Essex and the Home Counties, which are all within easy commuting distance of London.”
Private Finance reveal that if current trends continue, 51% of £1m plus property transactions will take place outside Greater London in 2017 for the first time on record.