Britain’s housing value hits £6 trillion

That dream of getting on the property ladder for first time buyers across the UK continued to get more expensive during 2015 with gains of £385 billion on British housing stock, writes property developer Richard Carr.

Wealth

 

Richard Carr image of UK homes

Homes prices have soared in the past year

Research for estate advisors Savills highlights residential property becoming an increasingly important store of wealth. Currently, total equity stands at just under £5 trillion net of borrowing, which is equivalent to over 2.7 times the GDP of the UK.

Since 2005, the total value of the country’s homes has risen by over £1.6 trillion, however 75% of that figure was achieved over the past three years. The rise now means that the UK’s 28.2 million homes now have an average value of £218,474, an 18.9% increase in five years.

London and the South

Housing stock in London accounts more than quarter of the UK’s total value at £1.6 trillion, having risen by £589 billion in the last five years.

Despite this, stock in the South of England exceeded London growth for the first time in five years, amounting to £179 billion. Outside of London, Bristol saw the biggest increase up £4.5 billion to £44 billion.

Richard Carr believes this shows that there are opportunities for property developers outside of London to maximise profits and take advantage of growing markets in and around the capital. Areas with good commuter links into London will continue to see the value of their housing stock rise as buyers look to get the most for their money.

The North

Over the past year, Birmingham in the midlands and Manchester in the north have received a lot of policy attention and investment and this was reflected in their growth.

Owner occupied homes are far the largest store of value, at £4.16 trillion, but the private rented sector now accounts for property worth £1.29 trillion, surpassing the value of mortgaged owner occupier stock for the first time in 2015.

Some 8.4 million owner occupiers with no mortgage outstanding on their property now own homes worth around £2.1 trillion, equivalent to almost £250,000 per household, and the total value of this equity pot has risen 22% in the past five years.