Five £1m postcodes

Britain now boasts almost 2,000 streets with average property prices over £1m - we look at the postcodes that really set you back!

Us Brits love a good chat about house prices. Just at the weekend my other half’s Grandfather speculated on how much our little maisonette has increased in value since we bought it last year.

And while it has probably risen by a decent sum in those 15 months, it’s still a long way off making it into the Rich List report from property website Zoopla.co.uk, published this week, looking at the most expensive postcodes in the country.

Paying for the postcode

Top place in the study is the W8 postcode, which is found in Kensington, with average house prices across the postcode a whopping £1.5m – up almost 10% from last year.

Indeed, only a solitary postcode in the top 10 comes from outside London, and even that isn’t exactly far away from the capital – Virginia Water in Surrey.

Let’s take a look at the top 10 postcodes in the UK.

Personally the idea of spending that much on a house is mind-boggling. It’s one thing to fork it out when playing  Monopoly, but in the real world those sorts of figures just feel a bit wrong.

All roads lead to London

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The domination by London will likely come as no great surprise to anyone – property in the capital has traditionally been far more expensive on average than the rest of the country.

Indeed, some property professionals view the housing market in London as an almost entirely separate market to the rest of the UK, such are its idiosyncrasies and tendency to be the anomaly when looking at nationwide stats.

And the statistics from the Zoopla study certainly emphasise the incredible dominance of the London market when it comes to astronomic house prices.

It’s not just that nine of the ten most expensive postcodes are found within the capital – London is also home to the overwhelming majority of million pound postcodes across the UK as a whole. Within the city there are an astonishing 1450 different streets with the average value of property in excess of £1m.

Across the UK as a whole there there are only 1,995, with Guildford in second place, boasting just 49 £1m streets.

The expensive South

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Outside of London we have Windsor & Maidenhead as the most expensive area to buy a house in the UK, with average property values of £392,825, up almost 4% (equivalent to nearly £18,000) over the past 12 months.

After that comes South Gloucestershire at £366,651, up by a staggering £31,500 in the past year (a little over 9%), while classic commuter areas and home counties dominate the rest of the list, with areas such as Surrey, Hertfordshire, Oxfordshire and Buckinghamshire all featuring.

Tell us something we don’t know!

On the face of it, none of this seems particularly surprising – expensive properties mainly found in the south, London boasts the most expensive of all.

But what’s clear is that while the housing market has staged a recovery over the past year (and we all have our own views on just how stable that recovery is), the North/South divide is getting wider.

On the whole, homes in the South have increased in value by more than those in the North have over the past year. OK, even the cheapest places to buy, according to Zoopla, have seen house price increases over the past 12 months – the cheapest of all, North East Lincolnshire with average property prices of £118,000 has still seen prices rise by more than 4.5% in the last year.

However, that’s still well below the increases that most areas in the South have experienced. There is already a pronounced North/South divide on housing – do we really need that gap to get even wider?

The Capital Gains Tax equation

That’s exactly what might happen if the predictions of one financial adviser, AWD Chase de Vere come true.

The Government’s plan to raise Capital Gains Tax (CGT) to 40% from its current rate of 18% has led to many predictions that house prices will fall as a result, as landlords rush to sell off parts of their portfolio before the changes come into place.

However, while that may indeed lead to cheaper house prices at the lower end of the market, AWD reckons it might actually force prices UP at the top end. Its argument is simple enough.

AWD reckons that the CGT change will be coupled with a significant reduction in the annual capital gains allowance. Add that to restrictions on higher rate tax relief, and the wealthiest individuals may just look to property – not as an investment, but upgrading their primary residence - as a good home for their excess cash, particularly now the ridiculous Mansion Tax is out of the question.

As a result, prices at the top end of the market would be pushed up due to the extra demand.

It will be interesting to see if AWD’s suggestion does indeed come true. If it does, there will likely be more than five postcodes that can boast average property prices in excess of £1m by next year’s survey.