The total worth of UK housing has been estimated at four times the value of the country’s economy, according to property website Zoopla.
It has been claimed that Britain’s homes could be worth as much as £9.2tn on the open market, four times the value of the UK economy and £550bn more than this time last year. Fuelled by stamp duty breaks and a race for larger homes, house prices have soared since the restrictions on buying homes began to be eased in the spring of 2020. The lowest mortgage rates on record have also helped to spur higher prices.
Zoopla has said the recent bonanza means the UK’s housing stock has risen in value by 20pc, or £1.6tn, since 2016, with the result that the average home is now worth around £50,000 more than five years ago.
The estimate is based on the website’s ‘automated valuation model’, which includes sales recorded with the Land Registry each month and combines these prices with other data given by house owners regarding schools and crime rates. The evaluation includes all 28.6m homes in the UK, not only those that have sold recently.
Low stocks could push prices higher
In the top 10, homes in the City of Westminster, London, have the highest total value of all housing in the UK, coming top at £164.6bn, followed by Kensington and Chelsea at £141bn, Wandsworth, London, at £117.3bn and Barnet, London, at £114.1bn. In fourth place is the Birmingham region at £102.3bn, then Camden, London, at £100.5bn, Cornwall at £91.8bn, Lambeth, London, at £86.8bn, and Richmond upon Thames and Bromley, London, both at £81.8bn.
The figures lay bare the reality of the gulf in prices in different locations in Britain. Zoopla reckons that the combined worth of homes in Westminster and Kensington and Chelsea, two London boroughs, 13 sq miles in area, is approximately the same as for the whole of Wales.
Yet in Westminster, the average price of a property was £898,000 in July, 3.1pc down on the previous year, official figures from the Land Registry show.
Neal Hudson, housing market analyst at BuiltPlace, says the figures reveal the imbalance in housing wealth, how it is concentrated in London, and demonstrates how much money there is invested in housing. But he pointed out that a house is only worth what someone is willing to pay for it. If everyone decided to move and they all tried to sell at once, it’s highly unlikely all housing would be worth £9.2tn.
There have been signs that the continuing imbalance between supply and demand in the housing market could push up prices again, even though they dipped when the largest stamp duty breaks ended in June.
Tenure mix must be broadly based
The latest report from the Royal Institution of Chartered Surveyors (RICS) shows that despite a lull as the stamp duty deadline approached, buyers returned to the market in September.
The report also confirms that the lack of available stock is creating competition among buyers, as a result of which 68pc of its members have recorded more price rises than falls.
Simon Rubinsohn, Chief Economist of RICS, says the most striking finding in their latest residential market survey remains the imbalance between supply and demand. Furthermore, he adds, feedback from members indicates there is little reason to believe this issue will be solved anytime soon.
He believes delivering higher numbers of new homes is part of the answer but it is vital they are built in the areas where the shortfall is most acute. It is also critical to ensure, he said, that the tenure mix of the supply pipeline is broadly based to help address the challenges both in the private rental market and in social housing.
