The UK’s housing stock is now worth a record £6.79 trillion, about 3.65 times the UK’s GDP, according to new analysis published by Savills.
London and the South East of England again showed the strongest growth.
Over the past five years, these two regions, with a quarter of all UK homes, accounted for more than half the UK’s total value growth.
Their combined value was more than £3 trillion last year.
By contrast, the Midlands, North of England, Wales, Scotland and Northern Ireland combined had 57% of all UK homes but just more than a third (36%) of the value.
Key findings of the analysis included:
- UK housing stock value stands at a record £6.79 trillion, up £491 billion in 2016 and £1.86 trillion in five years
- Private housing equity topped £5 trillion for the first time
- Outer London outpaced central London, with Barnet recording highest growth
- South East of England outperformed London with Slough (+20%) the star commuter location
- Parts of the north of England face a longer wait to recover pre credit crunch value
- Economic uncertainty and mortgage regulation mean future generations will struggle to accumulate housing wealth
“Over the past three years, low interest rates and strong consumer sentiment have combined to deliver very strong value gains,” said Lucian Cook, head of residential research at Savills.
“But we are unlikely to see this pattern repeated.
“Economic uncertainty in the short term and more rigorous stress testing of mortgage lending in the longer term, will hold back house price growth and limit the ability of future generations to accumulate housing wealth.”
The over 65s now hold £1.42 trillion, or 43% of all equity held by owner occupiers.
By contrast, the under 35s hold just £70 billion (5%) of the equity, while the 35 to 49 year age group alone account for around a third — more than £500 billion — of all owner occupier debt.
“Housing equity has always been weighted to older generations who have paid down their mortgages,” said Cook.
“But since the credit crunch we’ve seen the generation gap widen significantly as younger buyers increasingly struggle to get onto the housing ladder and older home owners live longer and accrue higher levels of equity through house price growth.”