Nearly 35,000 home owners have become property millionaires already this year, the vast majority in and around London.
The number of £1 million homes is now 50 per cent higher than it was in November 2007, when the financial crisis struck.
While the figures are likely to be welcomed by most home owners, the deputy governor of the Bank of England has warned that the surge in house prices, and the bursting of any subsequent bubble, is the single biggest threat to financial stability.
The total number of homes valued at more than £1 million grew by 34,374 in the four months to the end of April to 427,501, according to research conducted for this newspaper by the property website Zoopla.co.uk.
Just over 271,000 of the total were in London, where property prices have risen by 12.4 per cent in a year to an average of £414,490, according to the Land Registry. An extra 31,312 home owners in London are now sitting on million-pound properties.
Liam Bailey, the head of residential research at Knight Frank, said 500,000 people were likely to be property millionaires by the end of the year if house price growth continued at its current pace. “We believe this will happen,” he said. “To date London has seen the majority of growth but that is changing and the spread of property millionaires will move outside of London across the rest of the UK.”
A variety of house price data suggested this week that the recovery, which was initially limited to London and the South East, has spread across Britain.
The average UK house price climbed to £183,577 in April, up 10.9 per cent annually, according to Nationwide. Halifax put annual growth at 8.7 per cent and the Land Registry put it at a more modest 5.6 per cent, although this was the fastest rate that the body had recorded in four years.
Not all regions have seen a rise in demand for high-end homes, however. The number of properties valued at more than £1 million fell slightly in the East, the West Midlands, the North West, the North East and Scotland.
Wales has the fewest property millionaires with 1,048 — a number that has remained static since December.
The housing recovery has been driven by foreign investors, greater access to cheap mortgage finance and demand for properties far outweighing supply in many areas.
Critics warned that the growth is not sustainable. Sir Jon Cunliffe, the deputy governor of the Bank of England, said policymakers must decide whether to take action to cool the housing market, arguing that it would be “dangerous to ignore the momentum that has built up”.
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