London housing stock equals 22.5% of total UK property value

Sunday, 03 February 2013 12:30

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New research from estate agents Savills reveals that the total value of the UKs housing stock has risen slightly to £5 trillion over the last 12 months.

Its research also suggests that high values in London and the south-east are increasing the north – south property divide in the UK, illustrating the growing wealth gap between the South East and the rest of the UK.

It found that the total value of homes in ten London boroughs is worth more than the total value of the housing stock in Scotland, Wales and Northern Ireland.

In their annual ‘Valuing Britain’ analysis which used census and Land Registry data, Savills state that ten years ago the total value of UK housing stock was £2.9 trillion, rising to £5.4 trillion at the height of the property market in 2007.

Overall, UK property is now worth 6.4 per cent less than it was at its peak. However, illustrating the growing divide in property values across the UK, London property prices have risen by 14.2 per cent since 2007.

Homes in London are now worth a total of £1.12 trillion, almost 25 per cent of the entire value of the UK’s housing stock. London has just 12.2 per cent of the UK’s housing stock but 22.5 of its overall value.

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.”

Ten London boroughs – Westminster, Kensington & Chelsea, Wandsworth, Barnet, Camden, Richmond, Ealing, Bromley, Hammersmith & Fulham and Lambeth – have a total value of £550 billion, more than ten per cent of the whole of the UK’s properties.

One borough in the Home Counties, Elmbridge in Surrey which includes Esher, Cobham and Weybridge, has a housing stock valued at £31 billion, which is £2 billion more than the whole of Glasgow. The average house price in Elmbridge is £660,000, compared to £132,000 in Glasgow.

Windsor and Maidenhead has a total housing stock of £23 billion, slightly more than Cardiff. 

Meanwhile, other parts of the UK are dwarfed by the figures coming from the capital.

The value of property in London has risen by £140 billion in just five years, which is more than the total value of all homes in the North East at £128 billion, down by 19.3 per cent from its 2007 peak.

The high prices, combined with the difficulty of accessing mortgage finance, have led to a rise in the number of rented properties and demand for them.

There are now 4.8 million rented homes in the UK, up 61 per cent in the last 10 years, and the value of that stock, at £893 billion, has risen by 153 per cent in that period.

The dominance of London is even more pronounced in the private rented sector than in the owner occupied sector. London has 37 per cent of the UK’s total private rented stock value.

Owner occupiers now own £1.7 trillion of property with no mortgage loans attached to it, up 76 per cent in ten years and 1.4 per cent in 2012.

Lucian Cook added: “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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