Value of UK Private Housing rises by £1.8 trillion in past decade to £5.1 trillion

11 November 2015

New research from Halifax shows the value of UK's private housing stock in August 2015 is estimated at £5.1 trillion1. 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.

UK housing equity in good shape
The value of mortgage debt has also grown, rising by 35% since 2005 from £942 billion to £1.28 trillion. Nonetheless, 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) (see Table 1).

Martin Ellis, housing economist at Halifax, commented:
“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 ten year, net housing equity has grown by £1.4 trillion since 2005."

Strong rise in housing stock values across all regions over the past decade
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%) (see Table 2).

The North-South gap in the value of the private housing stock has widened since 2005.
The value of housing in the north increased by 36% compared to 66% in the south during the last ten 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 fourteen times the level in Northern Ireland – at £83 billion it is the lowest in the UK.

Halifax is playing its part in helping Lloyds Banking Group deliver the commitments made within its Helping Britain Prosper Plan, where the Group committed to invest £35m by 2017 in smaller house-builders' projects via its Housing Growth Fund to support the house building sector.