What’s a homillionaire you may ask? It’s a word coined by Savills Estate Agency that refers to homeowners whose property has a value of a £1 million or more. According to Harry Wallop, there are currently 399,000 homillionaires in the UK, most of them living in London.
The problem for many of these homillionaires is that while they own property worth a small fortune, they aren’t exactly rolling in dough. In fact, if you call them millionaires, they’d choke on their wine. The majority of homillionaires are in the same boat, sitting on a million pound asset but with a cash flow problem that makes life interesting towards the end of the month. The (long-term) silver lining is that once the property is fully paid off and they don’t have to worry about the bank reclaiming their share, the tight months (years) will have paid off and they might be closer to that real millionaire definition. After all, home ownership is one of the most tried and tested methods of wealth accumulation.
As property prices continue to rise, the number of homillionaires is set to increase. Between October 2013 and February 2015, the number of homillionaires rose by over 53,000. Of the current 399,000 homillionaires, only 125,000 live outside London. This is partly because property prices in the capital have risen 16 per cent from last year and partly because of ongoing housing booms over the course of the past four decades which have had a massive compound growth effect.
Outside of London, Bristol is one of the fastest growing homillionaire destinations. According to James Toogood of Knight Frank in Bristol, the sale of properties in Bristol valued over £1.5 million, quadrupled in 2013.
Millionaires also on the rise
In 2013, a favourable FTSE 100 index led to the creation of 38,616 new millionaires in the UK, an increase of close to 22 per cent since 2010. According to research by CoreData Research, those figures in 2013, close on 1.5 per cent of households had assets in excess of £1 million, excluding their property.
The UK economy is still experiencing relatively steady growth, which has contributed to the creation of more wealth. Government schemes and low interest rates have opened up access to property ownership across the spectrum of the British population and even with rising property prices many first-time buyers are able to get their crucial first step on the property ladder.