The value of UK’s private housing stock in August 2015 is estimated at £5.1 trillion, according to new research from Halifax. This compares with £3.3 trillion in 2005, an increase of £1.8 trillion – or 53% – over the past decade.
The increase of £1.8 trillion since 2005 is equivalent to £76,316 per household in the owner-occupied and private rented sectors. The value of the UK private residential housing stock has grown at a faster rate than consumer prices, with the retail price index up by 35% in the past decade.
In the past year, the value of private housing stock grew by £262 billion, mainly reflecting average house price growth of 4% in the year to August.
The value of mortgage debt has also grown, rising by 35% since 2005 from £942 billion to £1.28 trillion. Meanwhile, the value of the private housing stock has grown by over five times as much as outstanding mortgage debt; £1.8 trillion compared with £334 billion. As a result, housing equity has increased by £1.4 trillion (60%) over the decade from £2.4 trillion in 2005 to £3.8 trillion.
Regionally, there is a wide variation in the level of housing equity, with a higher balance in the south compared to northern areas. The highest is in London where housing equity is estimated at £798 billion, which is equivalent to £305,749 per household. The next largest is South East (£722 billion, £223,197 per household), and the East (£461 billion, £212,263 per household).
Outside southern England, the highest equity levels are in the North West (£283 billion £109,043 per household), West Midlands (£251 billion, £128,703 per household) and Scotland (£241 billion, £124,679 per household).
Martin Ellis, housing economist at Halifax, said: “The combined value of all privately owned houses in the UK is estimated at close to £5.1 trillion in 2015. The increase in total housing value over the past decade is equivalent to over £76,000 per privately owned property.
“Aggregate net housing equity held by UK households is in a healthy state with total housing assets worth nearly £4 trillion more than the total value of mortgage debt. Despite the rapid rise in mortgage debt over the past 10 years, net housing equity has grown by £1.4 trillion since 2005.”
There has be a strong rise in the value of the private housing stock across all regions, with values more than doubling in London (105%) from £552 billion to £1.1 trillion over the decade. The next largest increases were in Scotland (72% or £136 billion) South East (55%), East (54%) and the South West (36%).
The value of housing in the north increased by 36% compared to 66% in the south during the last 10 years. As a result, the South’s share of total UK housing assets rose from 56% in 2005 to 61% in 2015.
Even within the South the share of private housing wealth in London has grown from 30% to 37% during the period. The total value of private residential housing stock in the capital is 14 times the level in Northern Ireland – at £83 billion it is the lowest in the UK.