In 2020, the total value of the UK’s housing stock reached £7.56trn, a new record high. And the north of England saw its strongest rise in housing value since 2005.
The value of the UK’s housing stock has hit the highest value on record, rising by £380bn in 2020. This is the fastest increase since 2015. And the £7.56trn equates to over four times the value of all FTSE100 companies. This is according to research by Savills, using data from ONS, Land Registry, MHCLG and UK Finance.
In the last five years, the UK’s housing stock increased by £1.33trn. This equates to an average of £266bn a year, which is some £114bn below the total for 2020. This growth is especially impressive with the recession backdrop and the prevailing economic uncertainty.
Additionally, for the first time, the value of mortgaged owner occupied homes surpassed £2.5trn. This was driven by longer mortgage terms and Help to Buy. The mortgage guarantee scheme is expected to boost this figure even further.
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A rapid increase in house prices
UK house prices increased by an average of 7.3% in 2020, despite the challenging and uncertain year due to the COVID-19 pandemic. People’s desire to move and the stamp duty holiday caused a surge in property transactions, pushing prices up and outweighing job and financial uncertainty.
After successive lockdowns and the rise in remote working, people’s property priorities changed. Many have been looking for more space. Some are also looking for dedicated home office space, high speed internet and access to a garden or balcony.
Lawrence Bowles from Savills says: “People reassessed their housing needs and preferences as a result of the pandemic and that drove a surge in transaction activity in the second half of last year.
“This triggered rapid price growth as many buyers who felt secure in their finances looked for larger homes to accommodate the multiple demands of home working and home schooling, as well as extra space for living and leisure.
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“It also meant that the total value of properties held with a mortgage rose by 6.9% as people stretched their borrowing to accommodate lifestyle demands.”
The north is seeing strong growth
The north of England, including the north-west, north-east and Yorkshire and the Humber, saw the largest annual increase in housing value since 2005, rising by £59bn. This is up from 1.07trn in 2019 to £1.13trn in 2020 which is a 5.5% increase.
The north-west and south-west are tied for the highest percentage growth in 2020 at 6.2%. The north-west’s housing stock is worth £561bn, rising by an impressive £33bn last year alone. And with major investment and development coming to the north-west, this will likely bring further growth to this region.
According to recent data from Zoopla, the north-west of England is currently leading regional house price growth, and Liverpool and Manchester is seeing the strongest property price increases on a city level.
Savills believes the north-west will be home to the strongest house price growth during the five years to 2025 with a 28.8% projected increase. Home to Manchester, Liverpool and Preston, the north-west is expected to continue leading house price growth with demand remaining high.
By Kaylene Isherwood
Source: Buy Association
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