On the day a Halifax survey has been published suggesting that sales of million pound properties has reached a four year high closer examination of the Land Registry data suggests that this may also have been the peak.
Typically around 0.75% of all sales of homes in England & Wales are over £1m but at the end of last year and into the first few months of this year we saw this proportion more than double. In March 1.8% of all transactions were more than £1m with 1.64% in April. Then in May this plunged to just 0.56% with scarcely more in June when the figure crept up to 0.85%.
There are several reasons for this reversal. Obviously the state of the economy and the problems in Europe will have dissuaded some people from moving. The tide of foreign buyers also slowed as Prime property prices continued to rise and yields for many fell below 5% but it is the cost of transacting has been the biggest break on buying. Stamp duty on £1m+ purchases at over 5% together with the rumour of new property taxes is providing genuine restraint on the one remaining part of the market not in cold turkey.
Talk in the late summer of some kind of ‘mansion tax’ by Conservative MP’s ahead of their party conference may just have been naive Grandstanding but, it looks like the malaise felt by the mainstream housing market is now infecting the very top end. Few will shed a tear for the millionaires suffering with unsalable piles but the next set of numbers from Land Registry due out on Friday will confirm whether it’s business as usual for the posh estate agents and their millionaire clients. I expect that when it comes to a property recession we really are now all in it together.”