Boom in £1m-plus homes outside the capital

More than half of sales of £1m-plus properties are set to take place outside the capital for the first time on record, our analysis reveals. Historically, the majority of sales over £1m have taken place in Greater London, but a closer look at Land Registry data suggest this is starting to change. London’s share of […]

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More than half of sales of £1m-plus properties are set to take place outside the capital for the first time on record, our analysis reveals.

Historically, the majority of sales over £1m have taken place in Greater London, but a closer look at Land Registry data suggest this is starting to change. London’s share of these transactions has fallen from 63% in 2011 to just 53% last year.

While London saw 2% growth in the number of £1m-plus transactions from 2015 to 2016, outlying areas which have attracted growing numbers of high-value purchases saw far greater relative increases in the size of their £1m-plus property markets.

Greater Manchester saw 37% growth, followed by West Sussex at 34%, Essex at 33%, Hampshire at 29% and Kent at 28%. (see table below)

	£1m+ transactions – 2015	£1m+ transactions – 2016	Change in volume	Percentage change
Greater London	12,171	12,430	12,429	2%
Surrey	1,398	1,540	1,539	10%
Hertfordshire	778	964	963	24%
Buckinghamshire	512	564	563	10%
Hampshire	407	526	525	29%
Kent	385	493	492	28%
Essex	361	481	480	33%
Oxfordshire	397	407	406	3%
Greater Manchester	258	354	353	37%
West Sussex	259	346	345	34%

Source: Private Finance analysis of Land Registry data for England and Wales, accessed 18/07/2017

If this trend continues, more than half of £1m-plus property transactions are set to take place outside Greater London in 2017 for the first time on record, we predict.

This may prove to be a conservative forecast, as the latest figures show that prices are currently rising faster year-on-year in all UK regions than they are in London (3%), with the exception of the North East (1.6%).

Across England and Wales, some of the biggest proportional increases in £1m-plus property sales in the last year have taken place far away from the capital. The following all saw growth of 100% or more: Blackpool, Carmarthenshire, Ceredigion, City of Derby, City of Plymouth, Derbyshire, East Riding of Yorkshire, Gwynedd, Northumberland, Nottinghamshire, Powys and Southampton.

Shaun Church, Director at Private Finance, comments:
“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.

“Buying a million pound-plus property is a significant financial commitment, and 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.

These tend to offer a more bespoke, flexible service. For example, buyers might leverage unconventional assets like jewelry, fine art or sports cars as a means of obtaining their property. The lender will take into account how liquid the assets are and make a judgment as to whether the borrower could sell an item to repay the loan.

“Private banks are also able to offer interest-only mortgages to such clients, giving them greater choice about when they want to repay chunks of capital, such as if they get an annual bonus. This type of flexibility can prove invaluable in ensuring borrowers can access the most affordable and suitable mortgage finance for them.”