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Housing stock worth £4 trillion

Saturday, 12 January 2008 1:15 AM

The combined value of all property in the UK reached £4 trillion during 2007, according to the findings of the latest Halifax Annual Review of the Value of the Housing Stock.

The figure increased nine per cent over the last 12 months according to the bank.

Furthermore, the total value of property in the UK more than trebled since 1997, with prices up by 208 per cent from £1.3 trillion.

This compares with a 31 per cent increase in the retail price index (RPI) over the same period.

Housing equity - the value of housing assets less the total value of outstanding mortgage balances - has also seen dramatic increases.

Equity has increased by nearly £2 trillion over the past decade - again up from £870 billion in 1997 to £2.8 trillion in 2007.

Housing equity increased by £198 billion in 2007 alone and has averaged an annual increase of £185 billion over the past five years.

The value of property equity also substantially outweighed mortgage debt.

While debt totalled £1.2 trillion, equity was 3.4 times higher, standing at £4 trillion.

Ten years ago private sector housing assets were only three times higher than mortgage debt - with housing assets increasing by more than mortgage debt each year since 1995.

"UK home owners have collectively accumulated an extra £2 trillion of equity in their homes over the past decade as property prices have risen," said Martin Ellis, chief economist at Halifax.

"This has significantly strengthened the household balance sheet. Mortgage debt accounts for only 30 per cent of the value of the UK's £4 trillion worth of housing assets."

However, the north-south divide has remained virtually constant over the past ten years.

In 2007 the value of housing assets in the south was some £2.2 trillion, compared with £1.8 trillion in the north.

As a result the south's share of the UK housing assets held steady at 55 per cent during 2007, while the share of the north was 45 per cent.

The two regions with the largest percentage of housing equity were the south-east (19 per cent) and Greater London (17 per cent).

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