Value of UK Housing Stock Rises to £6.8TN

Value of UK Housing Stock Rises to £6.8TN

Over the past few years, the UK has enjoyed low interest rates and a buoyant housing market. In further proof that residential property has become an increasingly-important store of wealth, research carried out by estate agents, Savills1, shows that the overall value of the UK’s 28.2 million homes has risen to a record £6.79tn. This figure is nearly one-and-a half times the value of all the companies quoted on the London Stock Exchange, and represents a £1.5tn increase over the last three years. The average value of a property in the UK has risen to over £200,000.

Where housing wealth has grown

The main beneficiaries of this increase in housing value have been Londoners, those aged over 50, and landlords. However, commentators expect the rate of growth to slow over the next few years due to uncertainty over Brexit, new measures introduced to curb lending and government policy initiatives designed to level the playing field between first-time buyers and buy-to-let landlords. The areas that have seen the biggest increase in property values are largely to be found in London and the south east.

With the total value of houses in London now exceeding £1.7tn, homes in the capital account for more than a quarter of the total value of the UK housing stock. The demographic profile of homeowners shows that more of the housing wealth is held by the older generation; those over the age of 65 now hold an estimated 43% of all owner occupiers’ housing equity, a figure of over £1.5tn. Whilst younger buyers increasingly struggle to get onto the housing ladder, older home owners are living longer and have built up higher levels of equity through a steady rise in house prices.

1Savills, Residential Property Focus, Issue 1 2017