£1m home deals break new ground

IT IS the ultimate feel-good news for home-owning Londoners obsessed with property prices. The sale of the first £1m house in any district gives the neighbours a warm glow.

It also sends those struggling to clamber on to the housing market ladder deeper into despair. These seven-digit deals are no longer confined to prosperous areas of the capital such as Kensington, Camden and Wandsworth, a new analysis shows. Homes in Newham, Lewisham and Hackney have change hands for more than the milestone seven-figure sum in recent years. There have been 19 £1m-plus homes deals in Tower Hamlets in the past three years while upandcoming Southwark has boasted 36.

The total number of £1m homes increased from 1090 in 2000 to 1750 in 2002, according to newly compiled numbers. 'One million pounds has become less of a psychological barrier and people do want bigger homes,' says Richard Forshaw, manager of estate agents Kinleigh Folkard & Hayward in Crouch End, which has seen a number of £1m deals for the first time in recent years.

Simon Tyler of advisers Chase de Vere says the industry has been slow to adjust to the new reality. Mortgages on pricey homes are harder to get and have less attractive terms.

'Some of the biggest lenders have relaxed their lending criteria to a degree but most still restrict the deals available, either by loading the interest rate or insisting on a bigger deposit,' he adds. Many also charge a fee of £5000 or more for loans above £1m.