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Million-pound home sales are soaring

By Somerset Guardian  |  Posted: October 11, 2012

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Sales of homes worth more than £2 million have soared by nearly 80 per cent year-on-year, but house prices generally have remained flat, Land Registry figures show.

There were 160 sales of homes worth £2 million or more in June, the latest month for which the figures are available, representing a 78 per cent increase on the same month in 2011, despite the introduction of a stamp duty rate of seven per cent on homes in this bracket in April this year.

The vast majority of these sales took place in London, which has attracted wealthy overseas investors to the "safe haven" as the eurozone turmoil continues.

The number of homes sold for more than £1 million across England and Wales was also up by 35 per cent year on year, with 647 sales in total, while sales of homes in the average house price bracket, worth between £150,000 and £200,000, were down by four per cent.

House prices were at a standstill in August month-on-month, with typical prices standing at £163,376, just 0.7 per cent higher than a year ago. London showed by far the strongest price growth year-on-year, with a five per cent increase taking average prices to £364,059. The South East showed the next highest annual increase, with a two per cent rise pushing prices to £211,050.

Wales saw the biggest house price fall year-on-year, with prices dropping by 3.2 per cent to reach £115,887 on average.

Lenders have tightened their borrowing criteria amid the weak economy, making the struggle to get on the housing ladder even tougher for many people.

But a Bank of England report published earlier this week found that a recently-launched £80 billion scheme to kickstart lending has helped to increase mortgage availability.

However, concerns have been raised that more needs to be done to give a helping hand to people with lower deposits.

The National Association of Estate Agents (NAEA) has called for the Government to go further to kickstart the housing market, which could include increasing the tax-free Isa allowance to help people to save more for a deposit.

Mark Hayward, president of the NAEA, said a lack of access to mortgage finance, concerns over big deposits, and "prohibitive" stamp duty levels are holding many prospective homeowners back.

He said: "This is a situation we have been striving to encourage the Government to change for far too long."

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