UK Private Housing Stock valued at £4.0 Trillion

The value of the UK's private housing stock rose by 9% (nearly £320bn) in 2007 to a record £4.0 trillion (£4,000bn), according to research from Halifax. The value of the housing stock has more than tripled over the past decade, rising by 208% from £1.3 trillion in 1997. By comparison, the headline retail price index (RPI) has risen by 31% over the past ten years.

Housing equity rises by nearly £2 trillion over past decade

Housing equity - the value of housing assets less the total value of outstanding mortgage balances - has increased by nearly £2 trillion over the past ten years from £870bn in 1997 to £2.8 trillion in 2007. Housing equity increased by £198bn in 2007 and has averaged an annual increase of £185bn over the past five years.

UK household balance sheet strengthens again in 2007

The value of the private housing stock (£4.0 trillion) was 3.4 times the value of outstanding mortgage debt of £1.2 trillion at the end of 2007. Ten years ago, private sector housing assets were 3.0 times higher than mortgage debt. Housing assets have increased by more than mortgage debt levels in each year since 1995.

North-South divide holds steady during 2007
In 2007 the value of housing assets in the South was £2.2bn compared with £1.8bn of housing assets in the North. The South's share of the UK housing assets held steady at 55% in 2007, while the share of the North was 45%. However, the North - South housing wealth gap has narrowed over the past five years. The South accounted for 61% in 2002 and the North for 39%.

Strong rise in housing stock values across regions over the past decade

Each region has seen at least a 180% increase in the value of its housing stock since 1997. The value of the private housing stock has increased most in Northern Ireland (404%), Wales (223%) and the South West (222%) over the past decade.

Other Key Findings
Value of private residential housing by region

Six regions of the UK have a housing stock worth at least £250bn. A decade ago, only the housing stock in the South East was worth more than £250bn.
36% of the value of the UK's private residential housing assets is concentrated in the South East (19%) and Greater London (17%).

In 2007 Scotland saw the value of its housing stock rise by 16% from £213 billion to £247 billion, the fastest percentage rise for any region. Northern Ireland with a 15% rise to £123bn and the East Midlands with a 12% rise to £238bn recorded the next biggest increases.

The smallest percentage increase by region in 2007 was in Yorkshire & the Humber, which saw a 5% rise in the value of its private housing stock to £248 billion.

Household balance sheet

Housing equity was £2.8 trillion in 2007, up from £2.6 trillion in 2006. In 1997 housing equity has £870bn.

The value of housing assets increased by £318bn in 2007 significantly outpacing the £120bn increase in mortgage balances. Housing assets have increased by more than mortgage debt levels in each year since 1995.

In the past ten years, housing assets have grown by 208% against a 178% rise in outstanding mortgage debt. Household financial assets have increased by 69% over the period.

Household wealth has doubled over the past ten years. Net household wealth (including financial and property assets) is estimated at £6.7 trillion in 2007, up 106% from £3.3 trillion in 1997. Housing accounts for 41% of net household wealth, up from 27% a decade ago.

Martin Ellis, Chief Economist at Halifax, commented: “UK home owners have collectively accumulated an extra £2 trillion of equity in their homes over the past decade as property prices have risen. This has significantly strengthened the household balance sheet. Mortgage debt accounts for only 30% of the value of the UK's £4 trillion worth of housing assets."