More £1m+ London home buyers resorting to mortgages
74pc per of homes costing £1m or more in the British capital were bought with a mortgage in the three months through July, up from 65pc a year earlier
More home buyers are resorting to mortgages to buy London’s most expensive houses and flats as rising prices drag them into higher tax brackets.
Seventy-four per cent of homes costing £1 million (US$1.4 million) or more in the British capital were bought with a mortgage in the three months through July, up from 65 per cent a year earlier, according to Hamptons International. The figure was as low as 31 per cent during the depths of the financial crisis in 2009.
“Higher stamp duty above the million-pound mark means that owners have to fork out for more tax, eating into equity they might otherwise have had to buy outright,” said Fionnuala Earley, residential research director at Hamptons.
“The rise in house prices” means that “many normal family homes in the capital now attract this value.”
Stamp-duty rates climb according to property values, with homeowners paying a levy of £43,750 on a £1 million house, according to HM Revenue and Customs figures for single property ownership. That jumps to £153,750 for a £2 million purchase.