Sales of £1m homes hit new heights as top end of market defies decline

There were 60 million-pound property sales in Scotland in the first half of 2011, according to a report by the Bank of Scotland – the largest total since 2008 when the booming market saw 90 million-pound-plus sales.

The figure is also 22 per cent higher than in the same period in 2010 – ahead of the UK average, where sales of million pound homes have risen by just 10 per cent over the past year.

The high end of the housing market has stood up comparatively well during the recession compared to the mainstream market, which has been hit by a lack of available lending for mortgages.

Overall, total property sales in Scotland fell by 12 per cent over the same period.

Those buying more expensive properties tend to be less reliant on mortgages – often paying in cash – and have more equity in their existing properties.

However, million pound sales continue to account for just 0.2 per cent of the Scottish housing market – compared to 1.1 per cent across the rest of the UK.

“The number of homes sold for at least a £1 million has increased significantly over the past year in marked contrast to the rather more subdued picture across the rest of the housing market,” said Suren Thiru, Bank of Scotland housing economist.

“Strong demand from wealthy cash-rich buyers both in Scotland and further afield, as well as limited supply of such properties, has helped to boost the level of activity at the very top end of the housing market.”

There are now an estimated 3,300 homes in Scotland worth at least one million pounds.

In July this year, a six-bedroom Victorian property in Gillsland Road, Morningside, sold for less than £300,000 under its asking price, going for £2.58m.

Almost half the million pound homes sold in Scotland in the first six months of 2011 were in Edinburgh, although 53 per cent of local authority areas north of the Border saw at least one sale of more than a million pounds. Edinburgh also recorded the highest number of million-pound property sales outside southern England.

UK-wide, the north-east of England saw the biggest leap in the number of million pound-plus properties, while four English regions – the West Midlands, Yorkshire and the Humber, the East Midlands and the North West all experienced a fall in million-pound sales over the past year. Almost two-thirds of all million-pound sales in the UK in the first six months of 2011 were in London.

Keith Denholm, head of Royal Institution of Chartered Surveyors Scotland residential group, said: “£1m plus properties have become more affordable for focused purchasers, which has no doubt led to the increase in transactions.”

He added. “Price adjustment from £1.5m to £1.2m, for example, could mean the difference for cash-rich buyers looking for the right property at the right price.

Vendors of these properties often have enough equity to reassess expectations and lower the asking price.”

In numbers:

3,300 homes in Scotland worth at least £1milion.

60 million-pound home sales in Scotland in first half of 2011.

22% increase in million-pound home sales in Scotland since 2010.

43% of all Scottish 2011 milion-pound home sales were in Edinburgh.

26: Number of million-pound home sales in Edinburgh in first half of 2011.

5: Number of million-pound home sales in Glasgow in first half of 2011.