The total value of all privately owned homes in Britain has increased above £5trn for the first time - almost three times the size of the economy, according to Savills.
The sharp rise in the value of residential properties across the UK, excluding social housing, has largely benefited homeowners with low or no borrowing and private landlords, as total mortgage borrowing remained virtually unchanged last year, the estate agent said.
The total has risen by £1.6trn in the past three years, supported mainly by low interest rates and a booming housing market.
“Over the past three years, low interest rates and strong consumer sentiment have combined to deliver very strong value gains,” said Lucian Cook, head of residential research at Savills. “But we are unlikely to see this pattern repeated. Economic uncertainty in the short term and more rigorous stress testing of mortgage lending in the longer term, will hold back house price growth and limit the ability of future generations to accumulate housing wealth.”
London and the South East again showed the strongest growth, but gains are more evenly distributed than at any point since the global financial crisis. Over the past five years, these two regions with just a quarter of all UK homes, have accounted for well over half the UK’s total value growth. In 2016 their combined value crossed the £3trn line.
By contrast, the Midlands, North, Wales, Scotland and Northern Ireland combined have 57% of all homes but just over a third - 36% - of the value, as housing market recovery in locations further from the capital continues to lag.
Intriguingly, the South East closed the gap on the capital for the first time since 2004 as London growth began to slow.