Million pound houses more common in 2016

The number of UK houses that sold for £1 million or more in the first half of 2016 increased by 12 per cent, compared with the first six months of 2015.

According to Lloyds Bank, 6,683 homes changed hands for at least seven figures between January and the end of June; that’s 737 more than the 5,946 in the first half of 2015.

Despite this weighty increase, the average price of homes bought for more than £1 million has fallen by seven per cent in the last two years, from £1,862,578 to £1,727,327 between the first halves of 2014 and 2016.

This drop has been blamed partly on less sales activity at the very top end of the market, with an eight per cent slump in the number of homes selling for more than £2 million while those with a sale price of more than £5 million fell by 17 per cent during that two-year period.

Another contributing factor is believed to be the three per cent stamp duty rate applied to second and buy-to-let properties, which took effect from April 2016.

“The strength of the London economy, stamp duty changes and the attractiveness of UK prime property to overseas buyers, could all play a part in the boost to sales at this level,” explained Sarah Deaves, private banking director at Lloyds Bank.

Million pound towns

Despite the rise in number of million pound homes, the last 12 months has seen Britain lose two of its three ‘million pound towns’ – where the average price of all house sales exceeds £1 million.

In the first half of 2015, Britain had three million pound towns: Cobham in Surrey, Beaconsfield in Buckinghamshire, Virginia Water in Runnymede.

Fast forward a year and only the latter remains with house prices averaging at £1,082,286, making Virginia Water the most expensive town outside London. Cobham wasn’t far behind though despite average house prices dropped five per cent to £987,836.

Nine in ten £1 million houses in the UK are in London, the south-east and east of England.

Outside of southern England, the highest number of million pound sales are in Edinburgh with 47, Trafford (31), Cheshire East (29), Stratford on Avon (16) and Harrogate (10).

M25’s six-fold price hike

Separate research from Halifax found that the average house price in towns near the M25 has increased by 551 per cent at a rate of £905 a month since the motorway opened 30 years ago.

It found that average house prices surrounding London’s 117-mile long ring road had skyrocketed by £326,000 since October 29th 1986.

Martin Ellis, Halifax’s housing economist, said: “Towns have, on average, outperformed the south east region as a whole with an average price £52,000 higher, yet prices have failed to keep pace with the dramatic rise in property values in the capital over the past three decades.

“As a result, towns around the M25 are now typically significantly lower than in London despite being on a par when the motorway opened.”

By James Francis