Million pound property sales underperform compared to wider housing market
The number of home sales worth at least a million pounds has declined to its lowest level since 2009, according to new research by Lloyds TSB.
There were 3,043 million pound property sales in the first half of 2012, the smallest total since the first half of 2009 and 11% lower than in the same period in 2011.
Sales of million pound homes account for a minor part of the national housing market, representing just 1% of total sales in the first six months of 2012. Even in London, million pound sales account for only 5.2% of all sales. Lloyds TSB estimates that there are around 166,000 homes in Great Britain worth at least one million pounds.
The research also shows that million pound property sales underperform compared to the wider housing market. The 11% decline in million pound home sales in the first half of the year was in contrast to the 3% market wide rise in property sales over the period. This is a reversal of the trend in 2011 when sales of million pound properties significantly outperformed the rest of the market.
London accounts for much of the decline in million pound sales, down 7% from 2,185 in the first half of 2011 to 2,034 in the same period this year, and this accounted for almost half (41%) of the national decline.
Despite this, over two thirds, 67%, of all million pound sales in Great Britain in the first half of 2012 were in the capital. Scotland accounted for the highest proportion of million sales, 1.7%, outside southern England.
Sales of homes worth at least two million pounds also fell. There were 670 sales of properties costing at least two million pounds in the first half of 2012, a fall of 10% on the same period in 2011 and the first annual fall since 2009.
But sales of homes worth over five million pounds continue to grow. The number of five million pound plus property sales continued to increase, rising by 5% to 81 in the first six months of 2012. This was the third successive annual increase.
‘The number of homes sold for over £1 million has fallen significantly over the past year, reversing the increases recorded over recent years. This partly reflects the changing market conditions for those looking to buy such properties including the 40% increase in the stamp duty rate for multi million pound homes,’ said Suren Thiru, Lloyds TSB housing economist.
‘However, there does remain a certain amount of strength at the very top end of the housing market with sales of homes worth more than £5 million continuing to outstrip the rest of the market with the very top end of London property market still seen as a ‘safe haven’ by investors,’ added Thiru.
The research also shows that a quarter of all the million pound homes sold in the first six months of 2012 were in the London local authority districts of Kensington and Chelsea and Westminster.
Edinburgh recorded the highest number of million pound property sales outside southern England and just under half, 49%,of the 379 local authority districts tracked recorded at least one sale of over a million pounds.
Over three quarters, 77%, of all five million pound plus sales are in Kensington and Chelsea and Westminster.