Across the UK, the house price boom has created a mass of new paper millionaires, often in unlikely places. Although the bulk of £1m+ properties are unsurprisingly located in London, seven-figure houses in Cambridge last year were up 200 per cent on 2006/7, while the average price of a property on Park Lane in Altrincham, Cheshire has reached £2.5m.
There are now an estimated 400,000 households in Britain living in property worth £1m or more, with a combined property wealth of £836bn. Meanwhile, the number of sales of £1m+ properties has tripled to 18,000 a year over the past decade.
Many bricks and mortar millionaires have simply benefited from substantial price rises in their local market, finding themselves property rich but cash poor. And while rising values are positive news for those who have already invested, high prices are pulling the housing ladder further out of reach for first-time buyers.
This is particularly true in the capital, where the biggest price growth and greatest increase in the total number of £1m+ properties has been seen. First-time buyers in London now need to pay up to nine times their annual salary, with only one in eight aspirants aged between 22 to 39 in the capital able to afford to buy.
The bank of mum and dad will become ever more important, as children depend on parents who’ve benefited from house price growth to pass down wealth to enable them to buy. Of course, while this is feasible for a section of society, for others the creation of more affordable housing and government initiatives to support first-time buyers are imperative to unlock access to the property market.