According to Lloyds data, the sale of property priced at over a million pounds in the capital has seen a decline of 8%, a trend that that the rest of the UK seems to be resisting.
Lloyds revealed that there was a 100% increase in the number of million pound plus homes sold in Wales during the first half of 2018, (up to 18 from 9 in 2017) a 67% increase in the East Midlands (up to 40 from 24), and a 19% rise in the West Midlands (up from 81 to 96).
The picture was less positive in other areas of the country. The biggest drop was in the North East, which saw a 38% fall in the sale of million pound plus homes (from 13 in the first half of 2017 to 8 in the first half of 2018).
Yorkshire and the Humber also saw a decrease in the sale of million pound plus homes with a 27% drop, from 55 in the first half of 2017 to 40 in the first half of 2018. The region also experienced a significant decrease in average property prices, with average prices falling from £1,452,252 to £1,367,672.
London landscape
The sale of million pound plus homes in London continued to decline, down 8% from 3,940 homes in the first half of 2017 to 3,628 in the first half of this year. The capital’s market share of million pound homes also decreased to 57% from 60% in 2017.
Changes to Stamp Duty on second homes, introduced in 2016, are a likely contributing factor to this decline. Sales in London were at their peak at 4,371 in the first half of 2014, dropping to 4,238 in the first half of 2016 and then continuing to decline in subsequent years.
Despite this, the top six local authority districts with the highest number of million pound plus property sales were still in London.
Sarah Deaves, UK Wealth Director at Lloyds Bank, said: “The trend of a split across the country in the purchase of million pound plus homes continues, with the capital still experiencing a decline in the number of sales.
Political uncertainty is likely to be influencing buyers’ decisions about investing in property in the capital, especially in homes at the higher end of the scale.
London and South East continue to dominate in overall share of high end homes but the Increases in stamp duty and capital gains tax for foreign investors have dampened demand in the capital, with more housing stock now on the market. The picture outside London seems to be moving in a different direction, particularly in Wales and the East Midlands. Explanations for this could be that homes outside of the capital are less likely to be used for investment with purchaser buying properties to live in.
The development of HS2 in addition to commuting links between the capital and Birmingham are also likely to be contributing factors to property investment in this region.”
