London house prices: Market for homes over £1m hits all-time high as buyers shun ‘vanity’ prices

The number of homes on sale for more than £1 million in London has risen to a record high as buyers walk away from “vanity” asking prices, figures reveal today.

There were 19,243 houses and flats on the market with a seven-figure-plus price tag in early June, up from 18,844 a year previously, according to analysis from property portal Rightmove.

With prices static or falling across most of London, the increase appears to be down to a growing backlog of expensive homes failing to sell in a tough buyers’ market, according to agents. North London agent Jeremy Leaf said: “This is definitely something we are seeing on the ground. More expensive properties have become harder to shift. It is probably taking double the time to sell them, and even that is only after there has been a couple of reductions in price to get it to a level where it is going to move.”

The latest Land Registry figures show that just 213 homes changed hands for more than £1 million in April, the last month for which figures are available, down 14 per cent on the previous April and one of the lowest monthly totals for several years. The rate of sales suggests it would take seven and a half years for all the £1 million properties to find a buyer.

Buyers have been deterred by fears of taking on huge debt when the market is seen to be falling from all-time highs, the uncertain economic climate in the run-up to Brexit, and the high cost of moving.

At the same time increasingly desperate agents are quoting excessive asking prices just to get the business while many vendors are still reluctant to lower their demands. Buying agent Henry Pryor said: “Everyone knows it has become achingly hard to sell a house in London.”

Lucy Pendleton, co-founder of south-west London agents James Pendleton said the situation was worse in the higher price brackets. She said: “The market is still moving at £1 million to £1.25 million, but it starts to get slower around £1.3 million and it is completely stagnant at around £1.4 million to £1.5 million.

“In that part of the market people have often spent lots of money on their property but all have pretty much the same flooring, the same type of kitchen, it’s all very similar, and what was stylish four years ago is just going out of fashion. They think because they have spent X on their home it is worth X more, but it’s not necessarily the case.”

Hundreds of properties on the Rightmove portal were listed as having been on the market for years.

Miles Shipside, Rightmove director and housing market analyst, said: “Heady house price rises in London, especially between 2013 and 2016, shifted the goalposts for what £1 million can get you in the capital. A decade ago many buyers with a £1 million budget would have been presented with very large properties to choose from, whereas now in some areas you could be looking at this price for a standard three- or four-bed home, or even a two-bed flat.”