Savills : UK housing stock gains £190 billion and hits a record £7…

Thi puts gains from housing ahead of the £187 billion collected by HMRC in income tax in the twelve months to November 2018.

But reversing a decade-long trend, gains came from the regional markets as London's residential stock recorded a 1.5 per cent fall, the first since 2009, in the face of stretched affordability and broader economic uncertainty, Savills said today.

Despite slowing growth in London, it still accounts for almost a quarter of UK housing value, compared to a fifth a decade ago. London's housing stock is worth £1.77 trillion, over four times the combined value of Birmingham, Manchester, Edinburgh, Glasgow, Cardiff, Bristol, Liverpool, and Sheffield - all cities which saw higher rates of price growth than the capital in 2018.

Across the UK as a whole, price appreciation added a total £138 billion (72% of total gains), equivalent to growth of £4,800 per home. The balance of the uplift came from new housing development, which made its highest ever contribution to total gains: 28 per cent.

The increasingly cash-dominated private rented sector saw its value rise faster than all other tenures, up 4.1 per cent to pass the £1.5 trillion mark for the first time.

'Our analysis demonstrates the scale of the housing market and underlines the importance of housing to the economies of London and the UK as a whole, both as an asset class and store of private wealth,' said Lawrence Bowles, residential research analyst at Savills.

'Once again, we see that wealth concentrated in ever fewer, older hands, to the extent that the UK's over 50s hold a quarter of all UK homeowner equity, while the over 65s in London and the South of England alone account for over three-quarters of the total.

'At the same time, as affordability becomes more stretched, younger households are having to put off buying their first home until later in life. It's great that we're seeing more housing delivery, but development will have to make up a much higher proportion of new housing value if we are to come anywhere need building the homes this country needs.'

Key facts (see full tables below):

1. UK housing stock value up 2.7 per cent in 2018, adding £190 billion to hit a record £7.3 trillion.

2. Over a quarter (28%) of that total £190 billion value increase came from new housing development, the highest proportion contributed by new housing development since 2011 and reflects the Government focus on building more new homes.

3. The value of London's housing fell for the first time since 2009, losing £26.2 billion on the back of a fall of 1.5%. Still, the total value of London's homes stands at £1.77 trillion, some 24.3% of the UK total.

4. Wales was the region showing the biggest gains in percentage terms, with housing value up 6.3 per cent, adding £13.4 billion to total £226.1 billion. The East Midlands (6.2%) and West Midlands (6.1%) followed close behind.

5. Meanwhile the value of stock in the South East grew the fastest in absolute terms, with £29.9 billion added on the back of growth of just 2.2 per cent.

6. The private rented sector exceeded £1.5 trillion for the first time and grew the fastest of any tenure (+£60.9 billion, +4.1%). Equity now totals £1.32 trillion, leaving borrowing at under 14 per cent, as the residential investment sector becomes increasingly dominated by cash investors.

7. Owner occupiers without mortgages hold far the greatest share of equity. Their homes are worth a total of £2.58 trillion, up 3.3 per cent year on year, plus £83.3 billion. This total is 2.4 times total mortgage debt (£1.06tn) in the market.

8. Meanwhile, the value of mortgaged owner occupied properties grew just 0.6 per cent to £2.25 trillion. That's £330bn less than gains made by unmortgaged owner occupied homes, which are primarily held by older households. Just over half this total, £1.15 trillion, is housing equity.

9. Of the UK's £3.8 trillion in homeowner equity, the over 65s own 43.5 per cent, the highest proportion ever. Over £77 in every £100 of housing equity is held by the over 50s, equivalent to £192,400 per over 50 household and £213,600 per over 65 household.

10. Those under 35 own just £0.19 trillion (4.9%) of homeowner equity, reflective of a market where the average first time buyer deposit stands at £26,150,70 per cent higher than the average FTB deposit ten years ago.

By region:	Housing value (£ billions)
	2017	2018	% change	£ change (£ billions)
London	£1,795.2	£1,769.0	-1.5%	-£26.2
South East	£1,357.6	£1,387.5	2.2%	£29.9
East of England	£787.0	£810.5	3.0%	£23.5
South West	£642.3	£670.4	4.4%	£28.0
North West	£503.8	£529.3	5.1%	£25.5
West Midlands	£441.3	£468.2	6.1%	£26.9
Scotland	£380.4	£400.7	5.3%	£20.3
East Midlands	£366.7	£389.3	6.2%	£22.6
Yorkshire & Humber	£365.2	£382.0	4.6%	£16.8
Wales	£212.6	£226.1	6.3%	£13.4
North East	£148.7	£152.7	2.7%	£4.0
Northern Ireland	£95.1	£100.7	6.0%	£5.7
UK Total	£7,095.9	£7,286.2	2.7%	£190.3

Source: Savills research

By tenure:	Housing value (£ billions) in		% change	£ change (£ billions)
	2017	2018
Owner Occupied Unmortgaged	£2,500.3	£2,583.6	3.3%	£83.3
Owner Occupied Mortgaged	£2,231.9	£2,246.4	0.6%	£14.4
Privately Rented	£1,499.8	£1,560.7	4.1%	£60.9
Social Rented	£490.0	£509.8	4.0%	£19.8
Other	£373.8	£385.7	3.2%	£11.9
All tenures	£7,095.9	£7,286.2	2.7%	£190.3

Source: Savills research