The number of £5m-plus mortgages increased by nearly two-thirds between 2020 and 2021 as those making large property purchases took advantage of the low-rate environment.
Following a Freedom of Information request from We Buy Any Home the Financial Conduct Authority (FCA) released figures showing that the number of property sales with mortgage values of more than £5m in 2021 stood at 279, compared to 169 in 2020 – representing a 65% increase.
Mortgages for properties costing more than £10m almost doubled, rising from 40 in 2020 to 72 in 2021.
The average value of the £5m-plus mortgages stood at £9.5m in 2021, up from £8.9m year on year, and the total value of the market last year was £2.7bn, an increase of £1.1bn from 2020.
Last year 220 mortgage loans of £5m-plus were secured on properties in Central and Greater London, compared with 49 in the other regions and 10 that were classified by the FCA as “unknown”.
Terry Fisher, chief marketing officer at We Buy Any Home, said: “While most people who are borrowing between £200,000 and £300,000 will be offered mortgage rates of around 3% to 4%, those financing deals for prime and super prime properties will get much lower rates of around 1%.
“And because property is one of the rare assets you can borrow against, unlike stocks and shares, it means for a smaller initial sum you can secure a much larger loan and then leverage it against other financial deals and interests.
“These FCA figures will make grim reading for those struggling to get on the housing ladder at all.
“Property prices increased by around 10% over the past two years, with the global health pandemic sparking the so-called ‘race for space’.
“And while the current cost of living crisis and forthcoming recession could see prices fall, there is still a shortage of properties such as family homes with outdoor space. Even if prices do fall, increasing expenses elsewhere mean many first-time buyers will still be left out in the cold.”
