Housing Values Rise to 5.6 trillion

Posted by Tom Magor in Mortgages on 14 December 2016 - Tom is a Senior Credit Analyst at checkmyfile.

While housing prices have displayed a consistent rise over the past several years, according to a recent study conducted by Halifax, the total value of privately owned housing in the UK has exceeded £5.5 trillion for the first time.

Over the course of the last decade, the total value has grown by £1.9 trillion to £5.6 trillion, representing a rise of more than 50%. This considerably surpasses the retail price index which increased by 33% during the same period. The average UK house price currently stands at approximately £241,000, up from £174,000 in 2006, a 39% rise.

Martin Ellis of Halifax says, “A combination of higher house prices and an increase in the number of privately owned homes has seen the value of housing stock grow by £1.9 trillion in the past decade. Overall housing equity held by UK households is in a healthy state, with total housing assets worth over £4.2 trillion more than the value of mortgage debt. Housing equity has grown by £1.6 trillion since 2006. For almost one in three homeowners, who own their home with no outstanding mortgage debt, their financial position is even stronger.”

Perhaps unsurprisingly, total mortgage debt has increased by 25% over the last decade, from £1.1 trillion to £1.3 trillion. However, the value of private housing stock has increased by more than 7 times as much over the course of the same period.

However, there have been variations in the level of growth throughout different areas of the country. The north-south divide has further widened since 2006 with the value of housing in the south increasing more than twice as fast than in the north. As a result, the proportion of total housing assets held by those residing in the south increased from 55% in 2006 to 62% in 2016.

When focusing on the capital, the share of private housing wealth in London has increased from 30% to 37% over the last 10 years. To illustrate the considerable influence of the London property market, the total value of private residential housing in the capital is 14 times greater than Northern Ireland, which at £87bn, is the lowest in the UK.

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