26th October 2015
Sales of houses worth at least £1m has fallen sharply in the first half of 2015, according to research from Lloyds Bank.
The lender’s analysis found that transactions are down by 11% compared to the same period in 2014 – from 6,303 to 5,599 – which is in stark contrast to the 46% increase seen in the first half of 2014.
This is the first decline in sales since the first half of 2012 when the number of property transactions in this market segment contracted by 7% over the same period in 2011.
However, since the first half of 2005, £1m home sales have grown over three and a half fold from 1,540 – marking a significant rise of 264%.
Whereas last year the top end of the market outperformed the rest, the decline in million pound plus home sales this year has tracked the rest of the market, with sales of properties under £1m also falling by 11%.
Britain’s first ‘million pound towns’
Despite falling sales nationally, some areas continue to buck the trend. Virginia Water, Cobham and Beaconsfield are Britain’s most expensive towns, with an average house price of over £1m. This is the first time the average property price has hit £1m outside of London.
Virginia Water, in the historic Borough of Runnymede, is Britain’s most expensive town with an average house price of £1,168,992.
To live amongst the celebrities of Cobham in Surrey will require paying, on average, £1,042,552 for a home, making it the second most expensive town. In third place is Beaconsfield where the average property price is £1,003,367.
Sarah Deaves, private banking director at Lloyds Bank, said: “The number of homes sold for over £1m has fallen sharply over the past year, with a pronounced slowdown in the prime and Central London market. This may be the effect of the new Stamp Duty rates introduced last December and uncertainty generated by the election in May.
“However, the regional picture is much more mixed and we’re seeing the emergence of towns where the average price is at least £1m. Whilst there are several London neighbourhoods where prices are already at this elevated level, outside of the capital this is a first.”
Sales of £1m plus homes in London fell by 15% from 4,357 to 3,703 in the first half according to Lloyds, the largest decline in the capital since the same period in 2009 when transactions fell by 43% during the lowest point of the housing downturn.
In the South East sales in this sector fell by 9% in the first half of 2015 compared to a year earlier.
However, in Scotland the sales have more than doubled from 43 during the first six months of 2014 to 111 properties a year later, an increase of 158%.
The only other regions to have seen an increase in sales were Yorkshire and the Humber, up 10% and the East of England, with an 8% rise. In Wales transactions rose by 29%, albeit from a low base.
Despite these large movements, the sale of £1m properties account for just 1.3% of all national residential sales – although this share has more than tripled since 2005. Even in London, £1m plus sales account for just 8% of all home sales.
Steep drop in multi-million pound home sales
Lloyds also found the sale of multi-million pound homes in the first half of 2015 has fallen significantly compared to the same period a year earlier, with sales in the price range £5m to £10m 15% lower, and those selling between £2m and £5m down by 26%. In London the decline was 18% and 26% respectively.
While there could be a number of reasons for this, the changes to Stamp Duty in December 2014 mean, for example, that a buyer paying £5m for their property today needs to find £163,750 more than at this time last year to pay the tax
Prime locations still in central London
Two-thirds of all million pound home sales in UK are in London, with the largest national shares in Kensington & Chelsea, with 10% and Westminster at 9%.
The prime central locations are followed by Wandsworth, Hammersmith and Fulham, both 6%, and Camden, at 5%.
Elmbridge is the only local area district in the top 10 highest million pound sales from outside London with a 3% share of total transactions.
The combined number of £1m sales in Virginia Water, Cobham and Beaconsfield in the first half of 2015 was 86 – higher than the combined sales in the North East, Yorkshire and the Humber, East Midlands and Wales.
Outside southern England, the highest number of million pound sales were in Edinburgh and Cheshire East.