Housing gap at ‘record levels’ as foreign investors boost asking prices for prime properties

Published 24th Oct 2011

* Average for high-end properties rises to £472,340,
more than double that of typical homes
* Meanwhile prices generally fall and first-time
buyers struggle to get on the ladder



The 'wealth gap' between asking prices for high-end properties and typical UK houses has reached record levels, a survey found today.

Foreign investors have boosted sales at the top of the market, while at the other end first-time buyers have struggled to get on the ladder, according to property website Primelocation.com.

The company's monthly index said that the average asking price for prime properties - those in the top quarter of the market by value - is £472,340, some £250,000 more than the general average asking price.

The latest figures showed asking prices for prime properties increased by 0.5 per cent in September, the seventh monthly increase in a row.

Meanwhile, asking prices for properties generally fell by 0.2 per cent last month, with the typical asking price now £219,943.

The figures show the average premium property is being put on the market for 115 per cent more than the typical UK home.

Primelocation.com said the gap is the biggest in percentage and monetary terms since its records began.

Nigel Lewis, property analyst at Primelocation.com, said: 'Property at the lower end of the market has had a difficult time due to challenging conditions for first-time buyers while the top end, particularly in and around London, has continued to increase.

'Part of this is due to the significance of foreign investment in the UK prime market.'

Primelocation.com, which lists just under a million properties in the UK and overseas, said the gap between the two groups has been steadily rising since the index launched at the end of 2007, and the trend shows no sign of abating.

When the index launched, the average prime property was on the market for £157,255, or 68 per cent, more than the average property.

In February 2009, the gap widened to the point where prime properties were priced at 101 per cent more than an average property.

The latest research follows a Lloyds TSB report last week which found that sales of homes worth at least £1million have reached their highest level since the peak of the housing market in 2007.

Britain saw 3,375 sales of such properties in the first half of this year, an increase of 10 per cent on the same period in 2010 and the largest total since the first part of 2007, when there were 3,680 sales.

Source: ' ThisIsMoney '

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