Dramatic surge in £1m mortgages

The number of mortgages for £1million or more has jumped by one-fifth in the last year.

The sharp increase has been driven by a combination of soaring house prices and wealthier investors cashing in on low interest rates.

One in 14 borrowers now has a mortgage of more than £500,000, double the number in 2008, according to new research from The Guardian.

Nationwide building society has 269 customers with mortgages of more than £1 million, up from 167 one year ago, a rise of 60%.

NatWest expects to have issued 18% more £1 million deals by the end of 2015.

Upmarket brokers SPF Private Clients, which largely deals in the £1 million-plus mortgage market, has seen a 63% rise in business over the last year.

Overall, the average rise was around 20%

Large mortgages taken out by British buyers were most common in south west London, Surrey and Cheshire, while international investors tended to buy in the elite London borough of Kensington and Chelsea.

Four in five mortgages over £1million were based on London properties, with most of the rest in the Home Counties.

Halifax said the average yearly income of its customers taking out a £1million-plus mortgage was £389,000.

High-end brokers described their clients as mainly bankers, lawyers and City workers.

​Currently, the average £1million loan costs around £5,000 a month in repayments but this could go up to £7,000 if the base rate rises, brokers said.

Andrew Montlake, of brokers Coreco, said: “We have seen some eye-watering payslips over the past few months, as well as large bonus payments or exceptional sets of accounts which have been used to prove income.”