The current value of the UK’s private housing stock is estimated at £5.06 trillion, according to new research from Halifax. This compares with £3.22 trillion in 2004; an increase of £1.83 trillion, or 57% over the past decade.
The increase of £1.83 trillion is equivalent to £79,262 per household in the owner-occupied and private rented sectors since 2004. The increase in the value of the UK private residential housing stock has outstripped rises in consumer prices, with the retail price index up by 37% in the past decade.
Halifax said that in the past year, the value of the UK’s private housing stock has grown 14% (£630bn) from £4.43 trillion. This rise is the fastest annual growth since 2002 (21%).
Regionally, over the last 12 months the value of housing stock in London is estimated to have grown by £217bn and by £123bn in the South East; the two regions accounting for more than half of the total growth of the value of housing stock across the UK. An increase in average property values combined with a rise in the number of private new build homes coming on to the market have been the main contributing drivers.
The value of the housing stock has grown in all 12 UK regions over the past year, and all regions have also seen a significant increase in the value of their private housing stock during the last ten years. The largest increase was in London where the value of housing stock has more than doubled (109%) from £545bn in 2004 to £1.14 trillion in 2014. The capital is closely followed by Scotland, which has seen a rise of 96% (from £170bn to £333bn). However, there have been much smaller increases elsewhere with the smallest rises in the West Midlands (32%) and the North East (33%).
The value of mortgage debt has risen by 47% since 2004 (from £877bn to £1.29 trillion), but at the same time the value of the private housing stock has grown by more than four times as much as outstanding mortgage debt. As such, housing equity has increased by £1.42 trillion (61%) over the decade from £2.34 trillion in 2002 to £3.76 trillion.
Regionally, there is a wide variation in the level of housing equity, with a higher balance in the south compared to northern areas. On average, the highest amounts of equity are in London where housing equity is estimated at £820bn, which is equivalent to £313,466 per household. The capital is followed by the South East (£726bn or £219,163 per household), and the East (£447bn or £203,462 per household).
Outside southern England, the highest average equity levels are in Scotland (£249bn, £126,930 per household), the North West (£278bn or £106,011 per household), and West Midlands (£248bn or £125,532 per household). The lowest housing equity is in the North East (£84bn or £91,641 per household) and Northern Ireland (£14bn or £21,519 per household).
Martin Ellis, housing economist at Halifax, said: “The total value of all privately owned residential dwellings in the UK continues to increase, and over the past decade the value of housing stock has grown by £1.83 trillion, with a third of this rise coming in the past year alone. An increase in average property values combined with a rise in the number of private new builds has contributed to the increase in the value of housing stock across all UK regions, although the growth is stronger in London and the South East.
“Aggregate housing equity held by UK households is in a healthy state with total housing assets worth £3.76 trillion more than the total value of mortgage debt. Regionally, there is wide variation in housing equity, but importantly after the recent housing downturn all regions are showing increasing equity levels. More so, there are an estimated 7.2 million households in England that own their home outright and are mortgage free.”
