The rise of ‘homillionaires’
‘Homillionaire’ is a term used to describe the rising trend of homeowners who, by the forces of inflation and plain old good luck, have found themselves owning houses in excess of £1 million, but who are in fact average-to-moderate income earners. The term was coined by Saville’s, although it is disliked by some ‘homillionaires’. The average house price is now more than 6 times the average annual wage (9.1 times for London) so for many the hope of owning such valuable properties seems practically impossible, and this means that even the children of those who have found themselves owning £1 million properties are unlikely to be able to even get on the housing ladder.
125,000 of the 399,000 ‘homillionaire’ properties are outside of London. Knight Frank in Bristol has apparently seen a quadruple rise in the sale of properties over £1.5 million. This is attributed to the exodus of homeowners out of London, selling up and seeking a better quality property for a similar price elsewhere.
There are now almost 400,000 UK homeowners who have found themselves in this position, often to their own surprise. Those ‘homillionaires’ in London have benefitted from years of property inflation in the capital, not only the recent boom but also in the gradual price rise since the 1970’s. The same houses that sold for around £5,000 in 1970 are now worth over £1 million, according to John King of the Royal Institution of Chartered Surveyors. He observed, quite correctly, “Who could afford to buy the houses we currently live in if we were to start again now? Very few of us. Most people know it’s just luck and timing.” Although the average property price in London is £464,000, according to the Land Registry, there are still a great many homes over the £1 million mark, and the new ‘homillionaire’ trend shows that they are not uniquely owned by high-income families, but many by ‘asset-rich and cash-poor’ individuals who caught a lucky break in the London market.
Read more at http://www.telegraph.co.uk/finance/property/11384596/Whats-it-like-to-be-a-homillionaire.html