Total number of £1m homes now nearly 400,000

Nearly 93,000 more home-owners have become “property millionaires” in Britain over the last year, research from a website has found.

The total number of homes valued at £1 million plus by Zoopla.co.uk this month has grown by almost one third (31%) compared with a year ago to reach 393,127.

Zoopla said that continued strong demand for prime residential property throughout 2013 has created 92,985 more property millionaires in Britain over the past 12 months.

Three-fifths (61%) of million pound plus properties were found to be in London. Property prices in the English capital have consistently surged ahead of the rest of the country this year, prompting some concerns that the market there is overheating.

The Government recently announced plans for non-UK residents to pay capital gains tax (CGT) on property sales from April 2015. Much of the strong demand in the London market has been put down to wealthy overseas buyers looking for a safe haven to put their cash.

The exclusive borough of Kensington and Chelsea was named by Zoopla as home to the highest number of property millionaires totalling 41,393. 

Outside London, 21,028 more property millionaires were created in the South East during the past year, bringing the total to 82,614. The highest proportion of property millionaires outside the capital can be found in the Surrey postcode area of GU25 covering Virginia Water, where almost one third (32%) of homes were found to be worth over £1 million.

On a regional level, Wales was found to be home to the fewest property millionaires in Britain, numbering just over 1,000 in total but still up by one quarter (24%) on 2012.

Lawrence Hall of Zoopla.co.uk said: “While Government schemes such as Help to Buy have concentrated popular attention on the lower rungs of the property ladder this year, there’s been a hive of activity propelling house price gro03 wth at the top-end of the market.”

 

:: Here is the number of property millionaires by region, according to Zoopla.co.uk:

1. London, 239,703

2. South East England, 82,614 

3. East of England, 28,128 

4. South West England, 13,960 

5. North West England, 7,043 

6. West Midlands, 5,418 

7. Scotland, 8,161 

8. East Midlands, 2,667 

9. North East England, 2,574 

10. Yorkshire and the Humber, 1,814 

11. Wales, 1,043 

:: Total 393,127 

House prices rose by £1,394 in November

LSL’s latest index shows that house prices have risen by £1,394 in November alone, taking the average home value to a record £238,839 - 4.9 per cent up from November 2012. The price increase, though, is not just limited to London: on a year-on-year basis, values have climbed in all regions for the second month in a row.

The recovery applies to transactions too, with sales set to be 16 per cent higher in 2013 than in 2012.

David Brown, commercial director of LSL Property Services, comments: “The housing market is almost unrecognisable from twelve months ago... Competition is strong as a result of rising demand and supply of new instructions not growing, a factor that will continue to prop up prices in the long term. 
"Confidence is higher throughout the market, with the Help to Buy scheme and record low interest rates contributing to the positivity. Over the second part of this year, consumer confidence has snowballed as the economic picture improves, leading to a significant rise in sales. 
"The increased availability of mortgages - in part thanks to the government’s schemes - along with the greater range of mortgage deals on offer has opened the door to a new host of first-time buyers, making the dream of homeownership now a reality for thousands."

“Strong headway is finally being made towards a universal recovery," adds Brown, but cautions that there is "still uneven growth in property values across the country".

Indeed, London prices continue to race ahead with 9.2% annual growth in the capital vastly outshining the rest of the UK. 

"Between August and October, sales in London were up 27% on the same three months in 2012, reflecting intense demand for properties in that city, both from domestic and overseas buyers," continues Brown. 

“In his Autumn Statement the Chancellor unveiled plans to unleash a further £1 billion to unblock housing development, to address the critical shortage in supply. This will play a role in preventing prices rising too far too fast. But this is only the beginning, and it’s vital that house building is given greater attention in 2014 and beyond, in order to ensure the recovery rolls forward at a sustainable level.”

One third of tenants in the UK are planning to buy in 2014

ONE third (32%) of private tenants in the UK are planning to buy their first home in 2014, Rightmove reported this morning.

Nearly a quarter (24%) of those say they are looking to buy as a direct result of phase two of Help to Buy or have brought forward their plans to buy because of it.

One in five people (18%) currently living with their parents but planning to make the move to home ownership have also been influenced by the scheme.

But, said Rightmove, the shortages underpinning the housing market will not fundamentally change because of “a few months of Help to Buy”. The scheme is due to have a shelf life of three years, or 36 months.

The Rightmove report is published as new data from the ONS shows that the number of households in rented accommodation is now 34% of the total, up from 29%.

According to Rightmove, tenants in London and the south-east are keenest to buy, while those in the north-east and Scotland are the least likely, according to today’s Rightmove Consumer Confidence Survey, which questioned nearly 17,500 people.

Of those renting, over half (58%) are ‘trapped renters’ who would like to buy but cannot afford to. Only a small number (13%) are renting for lifestyle reasons, saying that it suits them, while 28% would like to buy eventually.

The increased number of tenants hoping to get their first step on the housing ladder could see rental prices staying flat next year, Rightmove predicts.

Miles Shipside, Rightmove director and housing market analyst, said: “More tenants look set to buy in 2014, but saving a deposit still requires time and commitment, meaning that overall tenant demand is unlikely to change much.

“It could ease a little in 2015, but the reality is that many first-time buyers will still be priced out of buying, especially with increased competition from buy-to-let investors attracted by solid rental returns and the possibility of increasing capital values.

“With there being an increase in supply of property to rent, it’s important that landlords improve the standard of their stock to attract the best tenants as there is more choice of property to rent in some parts of the country.

“In the past three years rental prices have increased by a total of 7.6%, and the fact it has slowed to 1.4% within the past year is an indication that landlords will have to try harder to get the best returns.

“More landlords and the increase in supply due to buy-to-let mortgage availability is likely to keep rental price growth in check in 2014.

“However, it could be that we see buoyant rental and sales markets at the same time as a result of the housing shortage of the last ten years, which won’t be solved by a few months of Help to Buy.”

The latest ONS data shows a sharp increase in the number of households in the private rented sector.

Matt Hutchinson, director of SpareRoom.co.uk, said: “The number of households renting has risen from 29% to 34%. While other household spend has stayed the same or increased, for most people rent is their biggest monthly outgoing. The ONS data tallies with our findings that not only are more people renting, but more are returning to shared accommodation, including couples and the over 40s. Flat and house sharing is no longer the preserve of young professionals and students.

“Soaring living costs means it’s a struggle for many renting households just to keep their heads above water, let along have enough spare cash to put aside towards deposits. It’s clear that the aspiration to own our own homes one day is fast becoming out of reach for British households.”

Supply of homes at lowest level in history

The UK’s housing inventory has hit an all-time low, according to Home.co.uk’s latest report.

The number of properties for sale in the UK has plummeted 38 per cent since December 2007, Home.co.uk reveals, taking the available housing supply to the lowest levels in history.

With buyer demand increasing, the low supply is driving up prices.

In London, where the shortage and demand are most severe, prices have bucked the seasonal slowdown trend, with values leaping 0.8 per cent in the last month alone.

Across England and Wales, prices slipped by only 0.1 per cent, although prices in the North East of England fell 0.7 per cent over the last year and are down 2.2 per cent in Scotland.

On an annual level, though, average prices in England and Wales have shown a post-crisis record rise of 6.1 per cent.

Doug Shephard, Director at Home.co.uk comments: "With such a low volume of properties for sale, there are concerns about how the market will cope with the impending upturn in buyer interest in early 2014.

"On the demand side, individuals and investors have access to relatively cheap credit and yet, due to the sheer lack of choice, the number of transactions that can actually be realised is very much restricted. Growing demand and diminishing supply will no doubt place further pressure on prices in the coming months, especially in London and the South East."

London house prices driving people to move away – but only 26 miles

Rising house prices have sparked a jump in the number of people looking to leave London but on average they only move 26 miles away, according to research published on Monday.

  Estate agent Hamptons International also found that throughout England and Wales people were generally reluctant to move far, with the average distance just 2.5 miles. 

  Its analysis of who is moving where found that 32 is the average age that Londoners move away, often because they have young families and want to settle somewhere outside the capital before their children start school. It forecasts central London prices will rise by 32% over five years and said that was a key driver in families moving out while staying close enough to commute back. 

  "In the last three months the number of London buyers registering with our country offices has increased by 12%. As house prices increase at a faster rate in London than anywhere else, Londoners are increasingly waking up to the idea that they can get more value for money outside the capital," said the group's head of sales, Marc Goldberg. 

  The south-east and west are the biggest draws, taking half the 250,000 Londoners who left the capital in 2012, the agent said.

  People aged between 19 and 25 are most likely of all age groups to move to the capital, largely reflecting students moving there and young graduates taking jobs in London. It also found that people moving into London move furthest – on average 34 miles. 

  While the average distance home buyers in England and Wales move was just 2.5 miles, that masked a wide range: two thirds moved within five miles but 14% moved more than 50 miles. People moving within London went an average of 1.3 miles.

Rightmove Infographic for November

Rightmove’s November House Price Index reported that the average asking price of property coming to market fell by 2.4% (-£6,181) in November, in line with the usual pre-Christmas slowdown.

Their infographic provides a breakdown of how prices are performing across each region and property type.