In the past decade, the total value of housing stock has grown by just over 50%, or £1.9trn, to reach an estimated £5.6trn outpacing the retail price index which grew by 33% during the same period.
During this time, the average house price has also increased by 50%, which in part is responsible for increase of value of stocks, alongside a 1.8 million injection of private homes to the market expanding the market to a size of 23.1 million houses.
Rocketing prices in London and the South East have accounted for over half of the rise in the total value of the UK’s housing stock. Residents in the capital have seen their home almost double in value since 2006.
The average value of a UK household now stands at £241,682, up from £173,837 in 2006 up almost 40% or £68,000.
Halifax housing economist Martin Ellis said the picture of housing equity held by UK households was in a ‘healthy’ position, as total housing assets exceeded mortgage debt by £4.2trn.
Total mortgage debt has also grown, rising by 25% since 2006 from £1.1trn to £1.3trn.
Homes in the north, by contrast, have grown two and a half times slower than housing in southern England, 27% compared to 70% over the last 10 years resulting in the south’s share of total UK housing assets rising from 55% in 2006 to 62% in 2016.
House prices are due to fall approximately 20% or more over the next 4-5 years. This is because highly geared BTL investors will place their property on the market which will create an oversupply of avaible property. As the majority of first time buyers cannot yet afford to purchase particularly in London and the South East, house prices will inevitably fall, as BTL investors will also be few and far between “thank goodness”. However as prices fall the FTBs will enter the market in their hundreds of thousands to snap up the available property creating only a short lived recession and creating further rooms to rent keeping a cap on rent increases.
Yawn! Change the record Colin !
Cynical Broker, only by repeating the same message hundreds of times did David Cameron, George Osborne, the Treasury and the Bank of England understand the need to remove the tax advantages of the BTL mortgage market as well as the need to tighten BTL mortgage regulation. Fortunately they took the necessary action which will benefit millions of first time buyers in the future and which will ensure that wealth is redistrubted from the “baby boomers” generation to the “millennials”.