by Alan MacDermid © The Herald
Originally published: 10.05.2008

They offer luxurious surroundings in superior locations - for a price. But despite the global credit crunch, it appears that in Scotland at least, there are plenty of home-buyers willing to splash out for their own million-pound mansion.

The top end of the country's housing market surged ahead of the rest of the UK last year with a 138% increase in homes fetching £1m or over, according to a new study by the Bank of Scotland.

Million-pound properties still account for a small proportion of property sales - 0.2% last year. But the increase north of the border - 343 sales in 2007 against 144 the previous year - was way ahead of the 36% rise in Britain as a whole, which reported a total of 8257 million-pound sales.

Together London and the south east of England accounted for 78% of the total number of million-pound properties sold, while Scotland accounted for 4%.

Edinburgh had the lion's share of these, with 148 sales, 43% of the Scottish total. They included Woodcroft, the record-breaking B-listed mansion in Barnton sold by Rangers chairman Sir David Murray in September for £4.95m, 10 months after he bought it for £4.5m.

Nevertheless, the spread of sales through the country means that over the past four years Edinburgh's share has fallen from 51% in 2003 to 43% last year. Glasgow, at 28 properties, recorded the second highest number of sales in Scotland in 2007, followed by Perth and Kinross with 22.

Martin Ellis, chief economist at Bank of Scotland, said: "Although there has been a marked increase in the number of million-pound property sales in Scotland since 2003, Edinburgh continues to account for a significant number of them.

"Nonetheless, Edinburgh's share of all million-pound property sales has declined, with a number of million-pound property clusters appearing across Scotland around places like Glasgow and Perth and Kinross."

If there is anything likely to curb this trend, it could be the slowdown of the property market in England, leading to fewer people heading to Scotland to benefit from relatively cheaper prices.

"Million-pound houses have been selling quickly - you can have some sales wrapped up in eight to 10 weeks," said Carolyn Campbell, of estate agents Strutt and Parker.

"In the last year we have sold probably a dozen, and that is on the west coast alone - Edinburgh sales will have been much higher. But we could see a change as a result of the market slowing down south."

That could mean fewer sales like Dunclutha House, a large traditional detached villa in St John's Road in Pollokshields, Glasgow, which boasts a distinctive observatory offering spectacular views over the city.

Ms Campbell sold it last year for £1.1m to a family from England who moved as a result of job relocation.

"They were able to sell their own house, but that might start to change," she said. "I don't think we have seen the effect yet but we could see fewer clients coming up here if they are less confident about selling their existing homes.

"I was speaking to one man who has put his house on the market and it is being valued at the same as it was a year ago, so he has in effect lost a year's growth in value."

The trend towards more million-pound houses dates back to 2003, since when there has been a seven-fold increase on the 47 properties sold then.

Over the past four years a total of 694 properties worth £1m or more have changed hands, of which 323, or 47%, were in Edinburgh. This was followed by Glasgow, with 46, and Perth and Kinross, with 36.

There were 66 sales of properties costing at least £2m in 2007, a nine-fold increase on the number sold in 2006. Edinburgh recorded the highest number of sales with 20 homes worth £2m or more being sold in the city. Glasgow recorded the second highest number of sales, followed by Perth and Kinross and East Renfrewshire.

Across Great Britain there were 1508 sales of properties costing at least £2m in 2007, a 49% increase on the number sold in 2006. Regionally, 68% of all £2m properties sold were in London.

After Scotland, the north-east of England recorded the second-highest rate of growth of million-pound properties, followed by the East Midlands (111%).

London, with the biggest concentration of £1m-plus properties, had the largest numerical increase in sales, but this translated into the slowest percentage growth rate, at 25%.