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British homes worth GBP £1 million to reach 500,000 in 2014

The current number of 427,000 homes in the UK valued at GBP £1 million (USD $1.7 million) or more is expected to reach 500,000 in 2014, indicating the fondness of Britons for luxury homes amid hard times.

As it is, the current number of luxury homes is about 50% higher compared to November 2007 before the US-led mortgage crisis caused the crash of many real estate markets around the world.

Property Forum explained the spurt of growth in the number of luxury homes in Britain, especially in London, to high demand from overseas investors who perceive the British capital city as a safe haven for their foreign currencies.

This has caused the foreign property investors to enjoy a definite advantage over locals that the British government is considering the introduction of a specific tax to level the playing field between local and international property investors.

But while putting a specific tax in place would have a short-term impact on demand, the limited number of luxury properties would continue to worsen.

The website pushed for some kind of control to produce a long-term impact on the cost of luxury property which also drags the price of traditional property out of the reach or ordinary Britons and leads to negative public opinion on the coalition government.

Despite government measures, house prices are expected to continue their rapid growth in the next two years, warned a survey made by Genworth Financial, a mortgage insurance group. The survey found that 72% of Brits expect home prices to rise further until the end of 2016.

Among the respondents who reside in London and South of England, 80% believe home prices would continue to escalate the next two years, which is shared by 62% of respondents from the North.

Because saving for a down payment, usually 20% of the selling price, is the hardest part for people who do not own their homes, 79% of the survey responds plan to seek financial help from the parents to raise the down payment.

Simon Crone, vice president of Genworth, told The Telegraph, “The Bank of Mum and Dad is an institution which is increasingly called upon and has become a permanent fixture of the British housing market – but with many households financially vulnerable, not everyone has the luxury of parental support.”


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