Fewer buyers for £1 million plus properties in the UK, research suggests

Competition for properties worth £1 million in the UK has fallen over the last two years, with just five buyers for each compared with eight previously.

Research by Investec Specialist Private Bank conducted with estate agents, developers and mortgage brokers operating in this market, also reveals that on average it takes between on and two months for sell a property worth £1 million or more.

But the market does vary. A quarter of those questioned or the Investec £Million Plus Property Market Barometer said that it takes less than a month to secure a sale while almost one in ten says that it currently takes more than four months.

High end estate agents, mortgage brokers and developers claim that the top three obstacles facing sales of million pound plus properties are a lack of stock, fear of a 'double dip' recession (and the impact this has on buyer confidence levels) and a lack of finance.

Indeed, almost half of those surveyed, some 45%, claim that the availability of credit to purchase million pounds plus properties is either 'poor' or 'very poor'.

‘Although there remains a lack of stock for sale, particularly at the upper end of the market, our Barometer shows that competition for £1 million plus properties has fallen over the last two years,’ said Jack Jones of Investec Specialist Private Bank.

‘Our findings suggest that one of the main reasons for this is the difficulty in securing credit and the inflexibility of lending criteria among some organisations,’ he added.

Investec recently launched a £Million Plus mortgage targeted at high net worth professionals who are not paid along conventional lines, but rather accrue irregular income such as lump sum bonuses. The new custom-made mortgage offering takes overall income and wealth into account rather than just the value of an individual's property and their regular monthly income.

The £Million Plus mortgage is aimed at the top end of the market, with loans available exclusively to individuals looking to borrow a minimum of £1 million with sustainable earnings in excess of £300,000 a year and an established balance sheet in excess of £3 million. Investec says that these individuals typically purchase properties worth in excess of £1.5 million.

The mortgages may be secured against a variety of assets including property, shares, investment holdings and offshore deposits, and are available in a number of currencies. The offering is not limited to UK nationals and includes the purchase and refinance of UK property residence and investment properties.

Courtesy : propertywire