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The past year has seen some major changes in the housing market across the UK.
£1 million properties have become more attainable than ever before, with record numbers of homes selling at or above £1m throughout Scotland and other regions in the UK.
So why was 2022 such a record-breaking year for £1 million property? In this blog post, we take a closer look at the factors contributing to this phenomenon.
What is a luxury property?
£1million properties are those which have an asking price of £1million or more and can range from single family homes to entire estates. These high-end luxury homes provide buyers with ample space, access to amenities and access to a premium lifestyle that is not easily found in other areas.
As £1million properties continue to gain popularity, it’s no surprise that 2022 has been a record-breaking year for £1million property sales in the UK, as demand continues to increase at a faster rate than housing supply is complimented by high sustained employment and changing social trends.
What is the demand for £1million property in the UK?
One in 40 homeowners are now property millionaires after price growth pushed more than 41,200 properties over the £1m threshold in 2022.
In Scotland, a record number of homes were sold for more than £1million last year.
The tally of 504 transactions above the landmark price surpasses the 419 sales in 2021, which, in turn, smashed the previous high point.
Just two years ago there were a record 280 £1m+ sales in Scotland, meaning the Scottish £1m+ market has risen by 80% in two years.
What are the reasons for the million pound property boom?
The £1million property boom in 2022 can be attributed to a few different factors.
1. The race for space
Changing priorities among buyers have created an increased demand for £1million properties as people seek out more space and better quality of life outside the city centre.
Properties such as those found in St Andrews, East Lothian and Edinburgh have become increasingly popular as buyers look for more space and better quality of life away from the city centre.
The race for space in the property market can be attributed to increasing numbers of people looking for larger homes with better access to amenities and outdoors spaces.
As city living becomes increasingly expensive, more people are seeking out more affordable areas that offer a better quality of life. £1 million properties have become especially attractive as they offer ample space and access to amenities such as parks, schools, shops and other services.
This race for space has created an increased demand for £1 million properties in the UK. This is especially true of Scotland where £1 million property sales have almost doubled in two years.
2. Rising house prices
The average £1 million property increased by around 8% year-on-year, with some areas seeing increases of up to 11%.
Rising house prices in the UK can be attributed to a number of factors.
A lack of affordable housing and an increase in demand due to population growth have created an imbalance between supply and demand, resulting in higher property prices.
Other contributing factors include changing economic conditions, rising wages, and low-interest mortgage rates, which were in place for a number of years.
3. Increase in popularity for luxury homes
The race for space has pushed the share of homes valued at £1m-plus outside of London to the highest ever recorded by Savills, since it began tracking the data in 2007.
In 2022, 53% of high value properties were located outside the capital, up from 51.8% in 2021 and 45.5% in 2020.
Demand for luxury homes has grown in recent years, as people look to upgrade their lifestyles and move into more desirable areas.
Luxury homes offer access to high-end facilities such as swimming pools and private gardens, plus services like concierge and housekeeping staff.
Additionally, luxury homes often come with generous square footage allowing homeowners to enjoy more spacious living.
What does the £1 million property boom mean for investors?
Simon Rettie, managing director, Rettie & Co. said: “2022 saw another surge in the number of prime residential transactions throughout Scotland.
“We are now seeing a pattern emerge where £1m+ houses are spreading more widely from the previous core areas of Edinburgh and Glasgow with St Andrews and East Lothian showing strong gains as they remain very desirable places to live with a limited number of prime houses coming to market.”
Lucian Cook, of Savills, said: “The number of property millionaires has shot up over the past three years, as a consequence of a booming post-lockdown property market and people placing a greater value than ever on their home and lifestyle.
“But it is no longer just a London phenomenon. There are now one million-pound hotspots across the breadth of the UK in the wake of the pandemic, after affluent home buyers changed priorities in the search for more space.”
Touchstone Education’s Paul Smith said, “The drive towards increased £1 million property shows the strength of the market to investors. Prices continue to increase in value creating equity for homeowners.
“The Covid-19 pandemic has also created a national property market boom, which means that some of the UK’s best towns and cities are also attracting more £1 million properties as demand for houses extends to much more than the south east.”
The fall in supply for housing pushes prices up, creating value for property investors. This is only going to increase over time as the UK population continues to rise.”
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