Home owners sitting on £5.6 trillion of property wealth

The value of housing stock has outpaced inflation and left UK home owners with an average value of £241,682, Halifax has claimed.

Research from the lender based on ONS figures found the total value of privately owned housing stock in the UK has grown to over £5.5 trillion since 2006.

In the past decade, total value has grown by £1.9 trillion, or 51%, to an estimated £5.6 trillion, beating the 33% increase in the retail price index.

The average value per household in the UK now stands at £241,682, up from £173,837 in 2006 – representing an increase of £67,845 or 39%, Halifax says.

In the past year alone, the value of private housing stock grew by £337 billion, mainly reflecting average house price growth of 12% in the year to August.

More than half, £1.1 trillion, of this rise is accounted for by London and the South-East.

Value of Privately Owned Housing Stock in the UK 2006-2016

RegionValue of housing 2006 – £ billionValue of housing 2015 – £ billionValue of housing 2016* – £ billion
North East108125125
North West335405419
Yorkshire and the Humber245303309
East Midlands230285299
West Midlands281345359
South East6649761,066
South West371473502
Northern Ireland848587

Martin Ellis, housing economist at Halifax, said: “The combined value of all privately owned houses in the UK is estimated at £5.6 trillion in 2016 – the highest on record.

“A combination of higher house prices and an increase in the number of privately owned homes has seen the value of housing stock grow by £1.9 trillion in the past decade.

“Overall housing equity held by UK households is in a healthy state, with total housing assets worth over £4.2 trillion more than the value of mortgage debt. Housing equity has grown by £1.6 trillion since 2006. For almost one in three home owners, who own their home with no outstanding mortgage debt, their financial position is even stronger.”

Meanwhile, data from equity release provider Key Retirement shows just how cash rich and asset poor some over-65s may be.

Using ONS figures, Key Retirement estimates that over-65 home owners, who have cleared their mortgage, have property wealth of £1.031 trillion, with more than £114 billion added to their property wealth since the start of the year.

The equity release specialist reckons pensioner property wealth has increased by £266 billion since 2010.

As you would expect, Dean Mirfin, technical director at Key Retirement, says pensioners could release some cash using equity release, although there are inheritance and cost issues to consider.

He said: “During a period of historically low interest rates and investment market volatility pensioners who have paid off their mortgages have been able to rely on steady tax-free returns from their home, demonstrating the increasing importance of property to retirement planning.

“The equity release market is responding with new products and record low rates to enable more customers to make full use of their property investment and use their money for a wide range of purposes.”

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Written by: Houseladder