The total value of the UK’s housing stock has hit a record high of £7.56 trillion despite the pandemic and prevailing economic uncertainty.
- UK housing value hit a record high of £7.56 trillion in 2020,more than four times the value of all companies in the FTSE100
- The value rose £380 billion compared to 2019, the fastest increase since 2015
- The value of housing in the North of England* saw its strongest growth since 2005 with a £59 billion gain
- London and SE account for c. £1.8 trillion and £1.4 trillion respectively (23% and 18% of the total)
- The value of mortgaged owner occupied homes passed £2.5 trillion for the first time, driven by support from the Bank of Mum and Dad, longer mortgage terms, and the support of Help to Buy. The mortgage guarantee scheme announced in last week’s Budget will boost this figure further.
A total of £380 billion (+5.3%) was added to the combined value of all homes in the UK, the fastest increase in housing value since 2015 and an incredible result given the recessionary backdrop. In the past five years, the UK’s housing stock appreciated by £1.33 trillion (+21.5%), an average of £266 billion a year, some £114 billion below the 2020 total.
“People reassessed their housing needs and preferences as a result of the pandemic and that drove a surge in transaction activity in the second half of last year,” says Lawrence Bowles, a director in Savills residential research team.
“This triggered rapid price growth as many buyers who felt secure in their finances looked for larger homes to accommodate the multiple demands of home working and home schooling, as well as extra space for living and leisure. It also meant that the total value of properties held with a mortgage rose by 6.9% as people stretched their borrowing to accommodate lifestyle demands.”
|
Total value |
% growth In 2020 |
Value gain In 2020 |
|
|
London |
£1,765bn |
6.1% |
£101bn |
|
South East |
£1,420bn |
4.9% |
£66bn |
|
East of England |
£855bn |
4.7% |
£39bn |
|
South West |
£706bn |
6.2% |
£41bn |
|
North West |
£561bn |
6.2% |
£33bn |
|
West Midlands |
£508bn |
4.9% |
£24bn |
|
East Midlands |
£418bn |
5.5% |
£22bn |
|
Yorkshire and the Humber |
£411bn |
5.0% |
£20bn |
|
Scotland |
£390bn |
4.5% |
£17bn |
|
Wales |
£245bn |
3.8% |
£9bn |
|
North East |
£158bn |
4.4% |
£7bn |
|
Northern Ireland |
£117bn |
3.2% |
£4bn |
|
United Kingdom |
£7,555bn |
5.3% |
£380bn |
Source Savills Research using ONS, Land Registry, MHCLG, UK Finance
North-South divide
The North of England saw its largest annual increase in housing value since 2005. Values in the North (*the North West, North East, and Yorkshire & Humberside) rose by £59 billion, from £1.07 trillion in 2019 to £1.13 trillion in 2020 (+5.5%).
That growth means the North, Midlands, Scotland, Wales and Northern Ireland together accounted for a record £2.81 trillion in housing value in 2020. Despite that growth, these regions, which together account for 56% of the UK’s homes, still only account for 37% of its housing value.
London and South East saw the value of its housing stock increase by £167bn (5.5%) to £3.19 trillion, meaning those two regions still account for 42% of the total value of housing stock in the UK but only 26% of all homes.
Mortgaged ownership rises again
Government support for homeownership and funding from the Bank of Mum and Dad have combined to support mortgage owner occupation, while longer mortgage terms mean households remain mortgaged for longer.
For the first time ever, the value of mortgaged owner occupied homes passed the £2.5 trillion mark, rising by £170 billion to £2.62 trillion in 2020.
Despite this rise, the value of owner occupied homes with no mortgage was higher still at £2.88 trillion, with the total value of homes owned outright rising by 5.8% in the year. 20% of this value was concentrated in the South East. A further 17% was in London.