London's pricey homes push more into mortgages

MORE home buyers are resorting to mortgages to purchase London's most expensive houses and apartments as rising prices drag them into higher tax brackets.

Seventy-four per cent of homes costing £1 million (S$1.8 million) or more in the UK capital were bought with a mortgage in the three months through July, up from 65 per cent a year earlier, according to Hamptons International. The figure was as low as 31 per cent during the depths of the financial crisis in 2009.

"Higher stamp duty above the million-pound mark means that owners have to fork out for more tax, eating into equity they might otherwise have had to buy outright," said Fionnuala Earley, residential research director at Hamptons. "The rise in house prices" means that "many normal family homes in the capital now attract this value," she said.