Prime property market remains buoyant
This is according to the Investec £Million Plus Property Market Barometer which reveals that almost three quarters (73%) of those surveyed say that confidence is either high or neutral among those people considering purchasing properties worth £1 million or more.
However, just over a quarter (27%) of those surveyed claim that buyers in the prime property market are concerned about future prospects. They believe that the top three obstacles impacting sales of million pounds plus properties are: a lack of suitable properties, fear of a ‘double dip’ recession and a lack of finance.
Latest Land Registry figures show that the number of properties sold annually in England and Wales for over £1 million increased from 506 for the year to August 2009 to 731 the year to August 2010, an increase of 44%. Signs of continued confidence at this end of the residential property market are supported by estate agents who have seen a marked increase in the number of buyers competing for each property worth £1 million or more. Indeed, Investec’s Barometer shows that almost two thirds (65%) of estate agents surveyed are seeing between six and 20 buyers per £1 million plus property.
Jack Jones of Investec Specialist Private Bank said, “Despite signs of sustained confidence in the prime property market, our research demonstrates that access to finance remains a major issue for those looking to purchase properties worth £1 million or more.
“Some potential buyers are struggling to secure mortgages and other personal loans due to the less flexible lending criteria adopted by many banks. We take a different approach and look at an individual’s overall income rather than just the value of the property they wish to buy.”
Almost half of those surveyed (45%) for the Investec £Million Plus Property Market Barometer claim that the availability of credit to purchase million pounds plus properties is either ‘poor’ or ‘very poor’. Mortgage brokers, in particular are concerned about the lack of finance.
Investec recently launched a £Million Plus mortgage targeted at high net worth professionals who do not get paid along conventional lines, but rather accrue irregular income such as lump sum bonuses. The new custom-made mortgage offering takes overall income and wealth into account rather than just the value of an individual’s property and their regular monthly income.The £Million Plus mortgage is aimed at the top end of the market, with loans available exclusively to individuals with sustainable earnings in excess of £300,000 a year and an established balance sheet in excess of £3 million who are looking to borrow a minimum of £1 million. It says that these individuals typically purchase properties worth in excess of £1.5 million.
The mortgages may be secured against a variety of assets including property, shares, investment holdings and offshore deposits, and are available in a number of currencies. The offering is not limited to UK nationals and includes the purchase and refinance of UK property residence and investment properties.