UK housing stock now worth a record £7.39 trillion after decade of gaining £750 million a day

Total gains last year stood at £101.8 billion (1.4%) and an extraordinary £2.74 trillion (46%) over the past decade, but while London and the South continue to dominate the UK map in value terms, the weighting of house price growth has shifted northwards (see table below).

Growth in the value of existing homes totalled £2.39 trillion over the decade and accounted for the vast majority (87%) of the value uplift, Savills says.  New housing development added just £0.35 trillion.  As development has accelerated and house price inflation slowed in recent years, that balance has shifted: new homes accounted for 40% (£41bn) of the value uplift in 2019.

“Established homeowners have been the among the greatest beneficiaries of house price growth over the last decade, many of whom have paid down their borrowing. The value of unmortgaged owner occupied homes has risen 67% over the last ten years,” reports Lawrence Bowles, senior research analyst at Savills.

“This leaves an unprecedented 46 per cent of homeowner wealth in the hands of the over 65s.”

London and the South vs the rest – a shifting balance

Over the past decade, the homes across London and the South of England accounted for almost three-quarters (73%) of all value gains, a total of £2.0 trillion and an average of almost £550 million a day.

But that ratio has flipped more recently. In 2019, 90% of the total housing value gains came from outside London and the South.  The Midlands and North of England accounted for almost two-thirds (64%) of the value uplift , with a further 26% from Scotland, Wales, and Northern Ireland combined.

Total housing value 1 and 10 year value gains by region

Source: Savills Research

“London and the South account for almost two thirds of the nation’s housing value, 63 per cent. But the rest of the country is catching up. The North and Midlands accounted for the majority of growth in the value of housing stock last year, thanks to faster house price growth and more development,” says Bowles.

Still, London’s housing stock ends the decade with a value of £1.77 trillion, 24% of the total while accounting for just 12% of the homes. At the other end of the scale, the North of England accounted for 24% of the homes but just 15% of the housing value. 

This means that London’s housing stock equates to more than twice the total value of homes in Scotland, Wales, and Northern Ireland. Housing in just two boroughs, Westminster and Kensington & Chelsea, is worth more than all the homes in Wales.

Value of private rented sector up 124% in ten years

The value of privately rented homes continues to rise, in spite of tax measures designed to discourage buy to let landlords.  The value of privately rented homes has more than doubled over the last decade: at £1.62 trillion, the sector’s total value has risen 124% in the past decade.  At the same time, the total number of privately rented homes has risen by 50%, though landlords still lag homeowners in the total value of their collected housing wealth.

Homeowners without a mortgage now account for £2.63 trillion in housing value, +67% up in 10 years and now equivalent to 36% of the total. This number has grown as older homeowners pay down their mortgage debt.

The value attributed to mortgaged homeowners has grown much slower: 22% over the last ten years and falling -1% in 2019 to £2.23 trillion. While first-time buyer numbers are holding up relatively well, mortgaged homeowner numbers continue to fall as older homeowners paying off their loans.

Of the £4.86 trillion value of owner occupied housing, £3.66 trillion (75%) was equity, with £1.2 trillion mortgage debt.