Although certain buyers would have benefitted from policies more than others, transaction figures showed that few were put off by the inability to make a saving and instead took advantage of the opportunity to move home.
So this week, Mortgage Solutions is asking: Has the performance of the UK housing market resulted in increased demand from high net worth borrowers?
James McGregor, director at Mesa Financial
We have found there has been a massive uptick in transactions on properties above £1m and a lot of the higher end agents we work with have also seen this. We have seen around a 50 per cent increase in transactions on purchases over £1m against the same period last year.
Although our data set is relatively small compared to the market.
The shift through Covid has seen a huge shift to greener areas away from London such as Surrey and the home counties. We have now seen a complete 360 and foresee London being in huge demand for 2022. I believe London will outperform the rest of the country this year as the world returns back to normality.
Given the options the high net worth buyers have, it definitely shows that money can be no object in certain circumstances.
We have seen numerous properties go for 10 to 15 per cent over asking price given the lack of stock in the desirable areas. Some of the agents we work with have been having nine or 10 offers on properties valued up to £2m which is unheard of, but shows the competitive nature of the market at the moment.
Most of our clients are having to go to last and final offers.
Rob Gill, managing director and co-founder of Altura Finance
There has been an increase in enquiries at that level, driven by two things; firstly, there is the domestic UK market which has shifted people away from city centres.
Properties with a value of up to £3m is a lot of money for most but actually for a wealthy individual, that’s a decent sized family home. I’m dealing with two enquiries at the moment from longstanding clients who are both deciding to leave London or London suburbs to go to the countryside and buy homes which are worth £2.5m or £3m.
They’re buying really substantial properties and I think that’s driven partly by the fact that they don’t need to be in central London every day.
The second factor is clients from overseas, who want to invest in the UK market because they see the country as stable. Especially people from the Middle East and Eastern Europe.
We’ve had a difficult two years with all kinds of geopolitical events going on outside of Coronavirus such as recent events in the Ukraine which is driving people towards the safe haven of the UK.
Some people are also able to purchase higher priced homes because they are moving from inner London to the suburbs of the capital. In a similar vein of not needing to be in the city centre every day, they are happy to extend a 20 to 40 minute commute to an hour or more as they don’t need to be near a Zone 2 tube station anymore.
The market has also become more competitive at this level because there is a real lack of stock. People tend to live in these properties for 20 or 30 years, meaning this is how frequently these properties come to market.
That increased during the stamp duty holiday so there were more opportunities for buyers. Now that seems to have ended and the biggest thing I’m seeing is a lack of stock but demand is still there.
Anthony Rose, co-CEO at Ldnfinance
The housing market has seen a very buoyant start to 2022, with lots of anecdotal evidence of sealed bids, bidding wars and gazumping.
This seems to be especially true at the higher end of the market where both “turnkey” properties; finished to a very high standard, as well as properties with potential, seem to be in equally high demand.
The return to the office for most professional staff has given renewed impetus to the London market, which has been lagging behind the home counties. This has allowed for competition for the market outside of the capital, which had been greatly boosted by buyers searching for greener space over the last two years of the pandemic.
An already buoyant out of London market, combined with a freshly buoyed London one, has brought high net worth buyers out in force.
The demand for properties in the £2m to £5m bracket seems very high, with both UK resident buyers and overseas buyers looking to enter a confident market still benefiting from historically low mortgage rates, despite the recent rate rises. The UK market seems to have shrugged off the concerns around an ongoing impact from Brexit on the high net worth market, as well as being one of the first to exit from the cloud of Covid.
It may be too early to confidently call the outcome of both points, but they do not seem to be weighing down demand in the market at the moment.
The buoyancy of the high net worth market is being partly fuelled by relaxed mortgage criteria from the high street banks, as well as a strong appetite to lend from private banks and more niche lenders.
All these factors combined with an almost continuously poor availability of new stock to buy is creating a very high demand in the high net worth space at the moment.
