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Housing stock value hits £5 trillion

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Published by Max Salsbury for 24dash.com in Housing and also in Finance

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The total value of the UK's housing stock has risen to £5 trillion in the last year.

And the stocks of just ten London boroughs are collectively worth more than the total combined wealth of Scotland, Wales and Northern Ireland.

Though the UK's total value remains 6.4 percent below 2007's peak, London's real estate is now worth 14.2 percent more than then.

In Northern Ireland, stock values have dropped by 10.2 percent since 2007, to £72 billion.

London's homes are now worth an aggregate £1.12 trillion, accounting for 22.5 percent of the UK’s housing value but just 12.2 percent of total stock.

The richest borough – the City of Westminster – has just 121,600 units, with a total value of £95 billion, more than twice the value of Edinburgh and almost three times that of Bristol.

According to the real estate adviser Savills' analysis, beyond the capital some pockets of very concentrated housing wealth exist.

The commuter hotspot of Elmbridge in Surrey (which includes Cobham, Esher and Weybridge) has a housing stock value of £31 billion, more than that of Glasgow (£29bn), while that of Windsor and Maidenhead (£23bn) is slightly more than that of Cardiff.

The biggest total value gains have been seen in the private rented sector, where demand has risen sharply post credit crunch.

Currently there are around 4.8 million private rented homes in the UK, up 61 percent in the past 10 years.

The value of that stock – which now totals £893 billion – has risen 153 percent in the 10 year period, 13.4 percent since peak and 5.7 percent in the past year.

At the owner occupier level, some £1.7 trillion of housing is now in the hands of owners with no mortgage debt.

This is an increase of 76 percent in the past 10 years, and 1.4 percent in 2012. By contrast, mortgaged properties have a total value of £1.8 trillion, just 42 percent higher than in 2002 and down -0.6 percent on last year.

This means that mortgaged owner occupied stock accounts for 37 percent of the total value of UK housing compared to 44 percent 10 years ago.

Lucian Cook, director of Savills residential research, said: "These distinctions between North and South, and in particular between London and the South East and the rest, and the concentration of housing wealth in ever fewer hands, will have long term implications.

"It will affect people’s ability to get on the housing ladder, trade up or relocate In turn, it has implications for social and labour mobility and, ultimately, the economy.

"Our analysis also highlights growing value in the private rented sector, not least because demand continues to outpace supply. This will create investment opportunities for those with equity, and opportunities for institutional investors to meet the needs of those excluded from home ownership."

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