Several years ago, it would have been unbelievable that a normal working class professional would be able to have enough ‘dough’ to purchase a property worth £1 million or above. Indeed we have found many buying such in recent times even without having any connection with the ‘Lords’ or ‘Royals’ – or perhaps filthy rich politicians from foreign lands.
I have read many times of sports personalities, movie and music celebrities, and other high profiled professionals buying houses worth £1 million plus, even as much as £5 million. In the 90’s it was almost becoming fashionable – and I am sure a point of discussion at parties where these people meet, to see many ‘so-called stars’ boasting about a new multi-pounds property purchase in Buckinghamshire or London, and other choice areas.
The story is however not the same for a few years now – and is getting worse by the day. Research by Investec Specialist Private Bank conducted with estate agents, developers and mortgage brokers operating in the U.K housing market show that competition for properties worth £1 million in the U.K has fallen over the last two years, with just five buyers for each compared with eight previously. These aren’t good times I tell you.
This phenomenon has been attributed to three major factors: serious lack of finance, lack of stock, and the fear of a ‘double dip’ recession (which generally hampers consumer confidence in the U.K).
Mortgage banks and other such financial institutions are being very careful as regards providing mortgage to candidates seeking more than a million pounds for choice properties. This should not come as a surprise; lessons learnt from the American housing market during and after the 2008-2010 financial crises are still very fresh in the public memory.
I wait to see how the U.K housing market will get out of this mentality and embrace the good old days when £1 million plus houses were stiffly competed for. Surely, those were ‘the good old days!’
