A report by the Halifax has cast a very interesting light on the UK housing market suggesting that total UK housing stock is now worth around £6 trillion. This represents a jump from just over £4 trillion in 2007 to a figure of just over £6 trillion in 2017. When you bear in mind the economic backdrop over the last decade this is a significant increase in value. So, how do valuations vary across the UK?
London and the south-east
It will come as no surprise to learn that the largest price increases have emerged in London and the south-east of England. Over the last decade London property has increased in value from £718 billion up to £1.33 trillion with the south-east rising from £732 billion to £1.08 trillion. These are phenomenal figures by any stretch of the imagination and despite the doom and gloom surrounding the UK housing market it seems that housing valuations are still in a long-term uptrend.
If we put this into context, the value of homes in London is now worth more than the combined value of homes in Scotland, Wales and the North of England. At a time when wage inflation has been to all intents and purposes non-existent the increase in the value of homes is even more astounding.
Over the last decade the only area of the UK to register a fall in property values is Northern Ireland where they fell from £121 billion in 2007 down to £92 billion in 2017. It would surprise nobody to learn that 68% of private property wealth is now situated in the south of England an increase from 62% in 2007. The owner occupier figures are also very interesting, showing an average of 63% for the whole of the UK but just 48% for London. It was seen that concerns about property investment as opposed to own occupier investment in London is well-founded.
The split of wealth between various age groups is more diverse today than ever before. The report by Halifax shows that a staggering 63.3% of net UK property wealth is held by those aged over 55. When you consider that just 3.3% of net UK property wealth is held by those under 35 years of age, the picture becomes very clear. However, when looking at “net” property wealth it is fair to say that the vast majority of those in the over 55’s bracket will have repaid most, if not all, of their original mortgage.
Net equity in housing
As we have mentioned on numerous occasions, to all intents and purposes London and to a lesser extent the south-east of England should be viewed as separate property markets from the rest of the UK. Such is the divergences in performance against the rest of the UK that in some ways comparisons are relevant and misleading. This is perfectly demonstrated by home owner property net worth which is £134,273 in the North West of England but a staggering £360,193 in London.
We all knew there was a significant gap between London/south-east of England and the rest of the UK, but to this extent?