According to a survey for the Investec £Million Plus Property Market Barometer, 73 percent of respondents believe that confidence is neutral or high among potential purchasers of £1 million-plus value properties. In addition, 65 percent of surveyed estate agents said that they are seeing between six and 20 possible buyers for every prime property.
Up to date Land Registry data offers some support to Investec’s figures. In the year to August 2009, 506 properties costing £1million or more were sold in England and Wales. By August 2010 that number had climbed 44 percent to 731 properties.
The biggest brake on this sector of the market is seen to be the tight credit environment. “Despite signs of sustained confidence in the prime property market, our research demonstrates that access to finance remains a major issue for those looking to purchase properties worth £1 million or more,” said Jack Jones of Investec Specialist Private Bank. “Some potential buyers are struggling to secure mortgages and other personal loans due to the less flexible lending criteria adopted by many banks.”
Nearly half of those surveyed for the Market Barometer said that availability of credit to purchasers of million pound-plus properties was poor or very poor, with mortgage brokers being particularly concerned about the lack of finance. Figures from the Council of Mortgage Lenders back this up, estimating that net lending for 2011 will be £9 billion, the lowest level since 1980.