Five-fold increase in property millionaires

The number of million pound properties has rocketed in the past decade. We look at which areas have benefitted the most.

It doesn’t seem that long ago that properties with million pound price tags were reserved for the mega rich and famous. Normal people didn’t live in such homes, even in the overpriced South East.

Now they seem to be 10-a-penny.

The massive growth in house prices in the last decade (despite the recession) has completely changed the UK housing landscape and created 100,000 new property millionaires each year since 2000, according to new research from Santander.

So, while the average house price are £166,203 according to Halifax or £237,767 if you listen to Rightmove, there are many people who live in homes that now top the magic £1m mark.

Rising fast

In fact, according to the Santander study the number of property millionaires in the UK has increased five-fold since 2000. Back then, there were 26,776 residential homes worth more than £1m. Now there are an enormous 131,996.

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The lender says this is a massive 393% increase in the number of million-pound-plus properties over the past decade. And it will come as little surprise that a huge swathe of them (78%) can be found in the capital -- that’s a whopping 103,168 £1m-plus homes in Greater London.

This marked increase in property millionaires has occurred despite the fact that during the credit crunch (2008 and 2009) 43,000 homes actually lost their millionaire status as their value plunged, a third of the total.

But they have bounced back quickly, with 29,000 more homes achieving million pound status over the past year alone.

So which parts of the country (aside from London), and indeed which parts of the capital, have seen the biggest rise in the number of property millionaires in the last decade?

Postcodes with the most property millionaires

As you can see London postcodes dominate the table, with the capital’s SW postcode alone claiming nearly three in 10 (29%) of the nation’s millionaire properties.

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Indeed, postcodes in London and the Home Counties including towns such as Guildford, Kingston upon Thames and Hemel Hempstead occupy all top 10 places in the league table.

Edinburgh is the first non-South East area in the league at 11th place with 1,665 million-pound-plus dwellings. Warrington in the North West is at 20th place in the table, with 1,066 property millionaires. As a North West resident myself I’m surprised that areas in Cheshire and South Manchester don’t come higher than Warrington here, but perhaps it’s something to do with postcode area sizes or boundaries. There are certainly more salubrious places to live in the region (no disrespect to Warrington, which is lovely!).

What the table does show is that property millionaires are springing up across the country.

Finding the finance

Many of those who have seen their property’s value rise to over £1m may have a significantly smaller mortgage, particularly if they bought a long time ago. But there are still thousands of people who now fall into the ‘large loan’ category as a result of rising prices.

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And in the last few years some lenders have reduced their maximum loan sizes as part of their overall criteria restrictions, meaning it’s not quite so easy for borrowers to get a jumbo loan through the usual channels.

Most mainstream lenders still offer some of their mortgages up to £1m, although many have other deals (often their more competitive ones) with lower maximums. For example, if you look at Santander’s mortgages some have a cap at £550,000 while others are available up to £1m.

Other lenders, particularly smaller building societies with less to lend, offer even lower maximums and there are some deals currently capped at just £250,000.

So where do you go if you need to borrow big?

The specialists

Going direct to a mainstream lender may not be an option if you want to borrow more than £1m.

However, some mortgage brokers, including those from lovemoney.com’s independent mortgage service, have access to the dedicated large loan desks of the bigger lenders. These are the parts of the business that specialise in lending over £1m.

In addition, there are specialist large loan mortgage brokers who only deal with jumbo mortgages. They have very close links not only to mainstream lenders but also to commercial and private banks, which account for a large proportion of residential mortgage lending over the £1m mark. Rather than promoting a set range of deals they will take applications on a case-by-case basis, offering a rate of interest and terms to suit each borrower.

Specialist large loan lenders and advisers understand the different needs and circumstances of such borrowers. For example, those borrowing over £1m often have more than one source of income, or receive large bonuses as part of their salary. By looking at cases individually specialist lenders can take all these circumstances into account more readily than their mainstream counterparts.

Not surprisingly, many large loan brokers are closely linked with high end estate agencies, and a large number of them are London based, although they will offer services to clients throughout the country.

Arranging a large loan needn’t be a problem, even if you want to borrow more than the high street lenders will normally offer. You just need to get the right advice.

If you need help arranging a large loan now, contact lovemoney.com’s fee-free mortgage advisers on 0800 804 4045 or mortgages@lovemoney.com for more help.

More: Pay nothing for your mortgage! | House prices fall for third month in a row

At lovemoney.com, you can research all the best deals yourself using our online mortgage service, or speak directly to a whole-of-market, fee-free lovemoney.com broker. Call 0800 804 4045 or email mortgages@lovemoney.com for more help.

This article aims to give information, not advice. Always do your own research and/or seek out advice from an FSA-regulated broker (such as one of our brokers here at lovemoney.com), before acting on anything contained in this article. 

Finally, we tend to only give the initial rate of a deal in our articles, but any deal which lasts for a shorter period than your mortgage term will revert to the lender's standard variable rate when the deal ends. Before you take out a deal, you should always try to find out from your lender what its standard variable rate is and how it will be determined in the future. Make sure you take all this information into account when comparing different deals.