Rich plot property buys despite failing market
Rich Britons are planning to buy property, despite the recent financial downturn caused by the credit crunch.
New research of "high net worth" individuals from American Express shows that 42 per cent are planning to buy a home for their personal use in the next year - despite months of property price falls in the UK. This is despite 25 per cent of the group expressing concern over the sudden state of the property market.
Other findings of the study also point towards Britain's high-earners not feeling the need to cut back on their spending despite the current economic conditions. Around 56 per cent were planning a more expensive holiday for 2008 than they took last year - while 45 per cent are also set to up their spending on gadgets and technology.
Other luxury purchases found to be popular with the high net worth poll respondents included eating out, making charitable donations, designer fashion and eco-friendly vehicles.
This is borne out by recent research from Halifax, which shows that sales of million pound and above properties in the UK are on the up. The transactions rose by a total of 36 per cent across 2007, despite the beginning of the credit crunch in the summer. The total sales, four in five of which were located in London and the south east, also represent a 13-fold increase over 1997.
However, a new report from top industry analysts at Bestinvest suggests that some of these rich Britons might have more trouble with securing a home loan on their new properties than they would before. According to the firm, the number of mortgages which stretch to over £1 million has reduced considerably in recent months.
Peter O'Donovan, head of mortgages at Bestinvest, commented: "The amount of lenders who are prepared to go to a million pounds has reduced considerably…I think it is partly due to the fact that lenders feel they have a smaller amount of money available to lend to at the present time. Therefore, they'd rather spread the risk over, say, 20 mortgages of 100,000 than two mortgages of a million pounds."
However, the expert added that some home loans were still available to high earners who knew where to look: "There are still the major lenders like Abbey, Cheltenham and Gloucester, Woolwich and Halifax - they'll still lend that sort of amount of money," Mr O'Donovan said. "There are still products out there, it's just there is a reduced amount of choice and criteria."
New research of "high net worth" individuals from American Express shows that 42 per cent are planning to buy a home for their personal use in the next year - despite months of property price falls in the UK. This is despite 25 per cent of the group expressing concern over the sudden state of the property market.
Other findings of the study also point towards Britain's high-earners not feeling the need to cut back on their spending despite the current economic conditions. Around 56 per cent were planning a more expensive holiday for 2008 than they took last year - while 45 per cent are also set to up their spending on gadgets and technology.
Other luxury purchases found to be popular with the high net worth poll respondents included eating out, making charitable donations, designer fashion and eco-friendly vehicles.
This is borne out by recent research from Halifax, which shows that sales of million pound and above properties in the UK are on the up. The transactions rose by a total of 36 per cent across 2007, despite the beginning of the credit crunch in the summer. The total sales, four in five of which were located in London and the south east, also represent a 13-fold increase over 1997.
However, a new report from top industry analysts at Bestinvest suggests that some of these rich Britons might have more trouble with securing a home loan on their new properties than they would before. According to the firm, the number of mortgages which stretch to over £1 million has reduced considerably in recent months.
Peter O'Donovan, head of mortgages at Bestinvest, commented: "The amount of lenders who are prepared to go to a million pounds has reduced considerably…I think it is partly due to the fact that lenders feel they have a smaller amount of money available to lend to at the present time. Therefore, they'd rather spread the risk over, say, 20 mortgages of 100,000 than two mortgages of a million pounds."
However, the expert added that some home loans were still available to high earners who knew where to look: "There are still the major lenders like Abbey, Cheltenham and Gloucester, Woolwich and Halifax - they'll still lend that sort of amount of money," Mr O'Donovan said. "There are still products out there, it's just there is a reduced amount of choice and criteria."
