The number of property hotspots around the country with homes costing more than half a million pounds has risen significantly during the pandemic.
Research from estate agents Savills found that the number is up 50 per cent, from 874 electoral wards in 2019 to 1,312 wards in 2021. The figures were based on sold prices from the Land Registry.
It means the total proportion of areas where the average house prices exceeds £500,000 has surpassed 15 per cent of Britain for the first time.
This four-bed house in Bathford, which is three miles east of Bath, is for sale for £1.5million via Savillls
Savills has looked at the areas in Britain with properties costing at least £500,000
The South West saw the largest rise in half a million pound sales, up 167 per cent, reflecting a surge house prices in more rural areas.
The number of wards in the traditional lifestyle relocation and downsizer hotspots, such as the Cotswolds and Bath, increased from 17 to 29.
They include Stow and Northleach, as well as Combe Down and the Chew Valley West.
At the same time, areas such as the South Hams and Cornwall saw an increase from four to 11.
Lucian Cook, of Savills, said: ‘The momentum for moving throughout the pandemic – born from a desire for more space, and spurred on by the government’s stamp duty holiday – resulted in a mini-house price boom across the country.
‘But with stock in long-favoured hotspots across the country unable to meet increased demand, surrounding wards benefited, too.
‘As a result, we’ve seen a surge in new geographical areas breaking the half a million pound threshold over the past two years.’
The increase in suburban and semi-suburban locations breaching the £500,000 threshold is most notable in London, with seven wards tipping over the half a million pound threshold in Croydon, and a further eight in Waltham Forest.
Now, almost two-thirds – at 63 per cent – of all London areas are seeing an average house price of £500,000 or more.
And a quarter of the wards yet to hit the mark in the capital are within £50,000 of that benchmark.
This five-bedroom house in the Cornish village of Tintagel is for sale for £1,199,950 via Jackie Stanley estate agents
While regions to the North still have the fewest number of half a million pound hotspots – the number in Yorkshire and the Humber has doubled in the past two years – from five to 10 (four located in Harrogate, and one in Ryedale).
Savills research also revealed the emergence of the first £500k wards in the North East, with three wards in Ponteland and the ward of Longhorsely joining the list.
Meanwhile, Scotland is yet to register its first £500,000 ward.
What does half a million pounds buy?
However, not all £500,000 homes are equal and vary in size significantly across the country.
The largest can be bought in the North East – at 2,017 sq ft on average -, versus just 869 in London.
Despite this, the amount of space half a million pounds can buy has shrunk just 2 per cent in the last five years in London, compared to a decrease of 13 per cent seen in South West, West Midlands and the North West.
At a local level, in Kensington and Chelsea, £500,000 buys 21 per cent more space than five years ago – albeit it still buys only 495 square feet – thanks to falling house prices experienced in prime central London in recent years.
Buyers in York and Rushcliffe (Notts) will have seen the opposite. In these two areas, the amount of square footage that can be bought for £500,000 has shrunk by 13% to 1,432 sq. ft. and 1,550 sq. ft. respectively.
This two-bed end of terrace house in Stow on the Wold, Cheltenham, is for sale for £575,000 via Savills
Mr Cook added: ‘The recent increase in prices also means the range of options for those with smaller budgets is getting increasingly limited, with even half a million pounds buying you an increasingly shrinking amount of space.
‘That said the four successive rate rises and the rising cost of living are likely to bring more caution in the coming months, which will mean that the rate of price growth slows progressively, potentially to low single-digit figures in coming years – which will come as welcome relief to many who are looking to make their next move.’
The recent increase in prices means the range of options for those with smaller budgets is getting increasingly limited
Rural and coastal areas have proved the most popular among house hunters during the pandemic.
Separate research by Rightmove found that some coastal hotspots had seen their asking prices rise by a quarter during the past year, with the Dorset hotspot of Canford Cliffs seeing asking values rise 24% last month compared to a year ago.
Tim Bannister, of Rightmove, said: ‘Right at the start of the pandemic when the market re-opened, we saw a huge surge in demand for these coastal areas as people wanted a sea view or more space near the coast.
‘There have been large periods where demand has greatly outstripped supply over the last couple of years which has contributed to the significant rise in asking prices we’re seeing today.