The rapid pace of house price growth may be unwelcome news to those trying to get on the housing ladder, but for those at the other end of the scale, it could be having a surprising benefit – namely, that a growing number of people are becoming "property millionaires", with research showing that over 600,000 homeowners can call themselves just that.
The figures, from Zoopla, show that the number of homeowners in Britain whose property is worth £1m or more has risen by 14% since January this year, equating to an increase of 75,796 people – or over 200 per day. It brings the total number of property millionaires to 622,939 and means that 2.2% of all homeowners now have a property worth £1m or more.
Perhaps unsurprisingly, 82% of these million pound homes are in London and the South East, with the capital alone accounting for 61% of them. In total, 380,337 homes in London are now above the million-pound threshold, marking a 33,871 (or 10%) increase since the start of the year – and in fact, 12% of London homes are now above the threshold.
However, it's regions outside the capital that have seen the greatest rise in the number of million-pound properties in the last year: the East of England saw the number of property millionaires rise by 28%, and by 24% in Yorkshire and the Humber. Wales also saw a notable rise of million-pound properties, up 11%, but it still has the fewest of any region (1,404). At the other end of the scale, Scotland was the only region to see a decrease in the number of million-pound homes this year, with the figure falling by 4.5% to sit below 9,000.
Considering the rate of house price growth at present, it's perhaps no wonder that so many more homes are passing the key £1m threshold. However, while it's good news for the homeowners themselves, it makes it far more of a challenge for those hoping to take the next step into these kinds of properties – but by all accounts, the trend could well continue.
"An improving economy and the ongoing lack of housing supply continue to put upward pressure on house prices at all levels of the market, and has nudged a whole new raft of properties over the £1m mark", said Lawrence Hall of Zoopla. "A price tag that was once the exclusive preserve of stately homes or massive mansions is now an increasingly common label for more modest houses, particularly in the capital."
So what does it mean for those hoping to take the next step? Well, preparation is key. This could include saving up more money to put towards the move – you may have built up a sizeable chunk of equity, but with prices rising so much, it wouldn't hurt to have a bit of extra capital behind you. Then you need to start looking for the right mortgage, and this really can be vital – with properties of this value, you don't want a high-rate mortgage holding you back as it could put unnecessary pressure on your mortgage repayments, so make sure to find the right deal and see if you can take the next step towards property-millionaire-dom.
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