Rising demand for luxury homes; UK sales highest in four years

As demand increases for luxury homes, UK sales
have risen to the highest levels in four years.

A total of 3,375 properties valued at over £1m were sold in
the first six months of 2011, according to Lloyd TSB. The sales mark an increase
of 10 per cent on the same period from last year, but also the highest number
of transactions since 2007.

The UK luxury property market continues to go from strength
to strength as wealthy foreign buyers seek prime property as a safe investment to counter ongoing Europe debt concerns.

The majority of the luxury homes were sold in London, with 2,163
houses bought for over £1m – a significant increase on the 1,926 properties
sold across the same period in 2010. A quarter of these were located in
Kensington and Westminster.

Other UK regions saw large rises in sales too, with the
North East selling 13 expensive homes, 10 more than the three sold in the first
half of last year. Outside of southern England, Edinburgh boasted the highest number of £1m-plus real estate transactions.

This growth is a trend that goes strongly against an overall
decline in property transactions across the UK (sales were down by 9 per cent
in the first half of this year). Indeed, the figures are now
higher than the peak of the housing market in 2007, when 3,680 luxury homes were
sold. Moreover, 739 homes worth over £2m were sold in the first six months of
2011, according to Property Wire – a jump of almost a third compared to
last year – yet luxury houses still only account for 1.1 per cent of the
country’s total house sales.

Lloyds TSB’s housing economist Suren Thiru commented:
“Strong demand from wealthy cash rich buyers both in the UK and from overseas,
as well as limited supply of such properties, has helped to boost the level of
activity at the very top end of the housing market.”