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Record surge in homes selling for more than £1m

Philip Thornton Economics Correspondent
Friday 08 November 2002 01:00 GMT
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More than £1bn worth of luxury homes changed hands in just three months over the summer as house-price inflation hit a record high, according to figures released by the Land Registry today.

Almost 1,000 homes were sold for more than £1m each in the three months to September – a 33 per cent increase on the previous quarter – with 176 changing hands for more than £2m each.

The government agency said the average selling price over the summer jumped to £146,150, up by 18 per cent from the previous summer.

This compared with a 13.5 per cent rise in the previous quarter and was the highest annual rise since the registry began collating figures in 1995.

The figures contradict anecdotal evidence from estate agents that a slowdown is under way, especially in the top end of the London market.

Instead the registry's figures showed that 983 homes were sold for a seven-figure sum – another record – of which 628 were in London.

All regions of England and Wales saw an increase in house prices, and there were signs that the traditional north-south gap might be narrowing. Of the four regions that enjoyed a 20 per cent-plus increase, two – east and west Midlands – were north of the line from the Wash to the Severn, while the two slowest-growing regions were London (15 per cent) and the North (13.8 per cent). East Anglia had the biggest increase, of 26.4 per cent.

Only one council area in the survey – Neath Port Talbot, in south Wales – saw a price fall. The average cost of property there dipped to £51,168 from £52,021 a year earlier.

Unlike the lenders' surveys, the Land Registry's figures are not adjusted to take account of seasonal and one-off movements.

Rightmove, an estate agents' website, said the registry figures were a bad guide as they recorded home purchase decisions made several weeks earlier. Rightmove compiles a survey based on agents' asking prices, which it claims spots trends before other surveys can.

Ed Williams, its managing director, said: "Our estate agents across the country are beginning to see the housing market cooling off, and Rightmove's latest data show almost static asking prices, growing stock levels and lower transaction volumes."

Halifax bank, the UK's largest mortgage lender, publishes its figures for October later today, although it has already passed the results to the Bank of England ahead of yesterday's interest-rate decision.

Last week Nationwide said annual price inflation hit a 13-year high of 24 per cent in October, although the monthly increase of 1.4 per cent was the lowest since March.

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