Millionaires feeling the pinch?

Britain's priciest streetFiona Hanson/PA Archive/Press Association Images

Sales of million-pound properties dropped in 2011, the first fall in two years. The total number of properties worth over a million which sold last year was just 6,911 - a 5% fall on the figures in 2010.

So are we finally seeing the culmination of David Cameron's promise that we are all in it together and we will all be feeling the pain? Are millionaires feeling the pinch too?
What do you think?

Multi-million pound homes

While the number of million pound properties fell, multi-million pound home sales hit historic highs. Sales of homes worth more than two million pounds continued to grow, according to research by Lloyds TSB.

There were 1,518 property sales worth at least two million pounds in 2011, a rise of 5% from 2010. This is the highest number of sales in this price bracket since records began in 1995. Sales of properties topping the two million pound mark were also 2% higher in 2011 than at the peak of the housing market in 2007.

In addition, the number of properties selling for over five million rose by 22% from 128 in 2010 to 156 in 2011, providing further evidence of the strength of sales at the very top end of the market.

Unsurprisingly, London and the South East continued to account for the overwhelming majority (84%) of all million pound sales in Great Britain in 2011. Over three-quarters (76%) of all two million pound plus sales in 2011 were in London, and more than half of all multi-million pound sales took place in just three boroughs: Kensington and Chelsea, Westminster and Camden.

Stamp duty

The increase in the stamp duty rate for homes purchased for more than two million pounds from 5% to 7% has resulted in a 40% rise in the average stamp duty bill for purchasers of such properties, but this has had little or no effect.

Suren Thiru, Lloyds TSB Housing Economist, said: "Continued demand from wealthy cash rich buyers, both from the UK and overseas, as well as limited supply has meant that this segment of the market remains largely immune from the headwinds facing the vast majority of homebuyers."

Better than us

Thiru added: "The rise in the number of multi-million pound property sales over the past year compares to the weakening picture across the rest of the market."

The 5% rise in multi-million pound property sales in 2011 contrasted to the fall in sales across the rest of the housing market. Overall, total home sales in Great Britain fell by 4% to 698,200 in 2011.

We may all be in it together, but some of us are in it more than others.

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