Homebuyers in the British market for million pound or more homes are no longer looking in London and its commuter belt but are now turning to the East Midlands. A review by Lloyds Private Banking in The Telegraph shows the East Midland area had an increase of 67% in sales of million pound or more homes in the 1H of 2018 rising from 24 transactions to 40 when compared to the same time period in 2017.
Sales of homes in London however for the million pound range have seen a decline by 8% with recorded sales for 1H of 2017 at 3,940 homes and 3,628 home sales in 1H of 2018. The city market share of million pound homes has dropped to 57% from 60% in 2017. The Stamp Duty on second homes tends to be the main reason for the decline as sales of million pound or more residences for London have from their peak period in 1H 2014 of 4,371 then dropping to 4,238 in 2016 when the Stamp Duty was introduced.
Also having an increase in million pound home sales is Wales which has experienced a 100% increase in home sales for 1H of 2018 from 9 in 2017 to 18 in 2018.
Sarah Deaves, UK Wealth Director at Lloyds Bank, in The Telegraph 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.”
“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.”
Also being reported is new data from Which?, the consumer group, that finds that 46% of all home owners in particular younger ones, have been making overpayments to their lenders to payoff their mortgages early in the period of June 2017 to June 2018. This includes the age group of 18 to 24 year olds at 69% and homeowners in the age range of 25 to 34 at 52% making overpayments to lenders.
Some homeowners are using extra cash in bank accounts that get low interest rates to help overpay on their mortgages.
Another report released by Zoopla in December 2018 finds that buying a home in Britain is better than renting in three quarters of the nation especially outside of London. For two-bedroom homes the analysis finds that 75% of mortgages payments in Britain’s local authority areas outside of London were less expensive than renting.
One location cited in the report was Hartlepool in the north east of England where the cost of having a mortgage is 47.4% less expensive than renting. Other areas include East Ayrshire at 45.5% Burnley at 45.4% and South Lanarkshire at 41.1%.