A new study by Barclays Wealth predicts that the UK will have the highest concentration of high net worth households of any of the G7 countries within a decade. Success in business is now the most popular way to become wealthy, with 71% of people claiming savings from their earnings is their largest source of wealth. The survey also reveals that 44% of people have found success through investing in the property market, compared with 30% who relied on an inheritance as a source of wealth.
This trend to greater wealth was confirmed in a study by the Portman Building Society last year which calculated there were 60,000 houses worth more than 1m in in England and Wales, half of them in London. But a follow-up survey reveals that traditional London hotspots including Kensington, Chelsea and Mayfair are no longer as popular as they once were.
Perhaps surprisingly, what is perceived as a poor London borough with a high density of immigrants, Tower Hamlets, has sneaked into the top five choices among the richest homebuyers. In London, the first choice for wealthy workers is now Wandsworth, according to research by Pan Peninsula, with Hammersmith & Fulham, Camden and Islington making up the next three.
And while there is a greater concentration of wealthy individuals in the South-East of the UK than anywhere else in the country, this is changing, with areas in the North of England and Northern Ireland experiencing the highest house price increases over the past year.
More than 1,300 streets in England have an average house price of 1m-plus, recent research from property information firm www.mouseprice.com reveals. In 2000, only 322 streets could make that boast. Every day, 15 homes in England and Wales are sold for 1m or more, according to the Land Registry. This includes about three at more than 2m. The highest-placed street outside the capital is Portnall Rise in Virginia Water, Surrey, where the average home will set you back 3.4m – 17 times the national average.
But 1m-plus houses are no longer confined to the South – dozens of streets in the North are now filled with property millionaires.
In the North East, the first ‘seven-figure street’ is Gubeon Wood, near Morpeth in Northumberland, where the average price is 1.1m. But the North of England also features strongly, with Yorkshire placed third and Lancashire sixth on the list of counties with the highest proportion of wealthy individuals. Areas such as the Peak District and the English/Welsh borders are attracting ever-greater numbers of the affluent that choose to live in the country and commute to their well paid jobs in the large cities. The UK’s top five areas for growth in high-earning residents are now all outside the South East of England.
Figures show 29 areas in England and Wales where more than one in 10 people earn over 60,000 a year. This was the case in just eight areas in 2003. This trend is likely to continue and screams opportunity for mortgage intermediaries. With house price inflation set to continue, more properties will be lifted into the 1m-plus category and brokers are set to make a healthy commission on sales.
This has not gone unnoticed by lenders. They have been busy designing incentives for brokers and their clients through which they can attract this growing client base.
This includes a bespoke service where the lender designs a specific product to fit a particular client’s needs. Networks are ideally placed to deliver mortgage products that target this marketplace. They have access to exclusive deals and one-off products, along with the ability to speed up and control the mortgage application process so an offer can be delivered to the client within 24 hours. This level of service is vital when dealing with high net worth clients.