Landlords own more housing wealth than residential mortgage-holders
After a 55% increase in the private rental sector (PRS) last year, landlord net wealth passed £1.077trn last year, according to estate agent Savills’ data, with mortgaged owner occupiers holding £1.067trn.
The total value of Britain’s housing stock passed the £6trn mark in 2015 for the first time after gains of £385bn over 12 months.
Owner occupiers with no mortgage still retain the biggest share of net housing wealth in the UK at just over £2trn.
“Value and gains vary sharply according to location and ownership,” said Lucian Cook, head of residential research at Savills.
“Gains have been concentrated in equity rich markets, notably London and the south east, particularly benefitting those who own their homes outright. In 2015, for the first time, the total value of owner occupied homes without a mortgage exceeded the total value of those with a mortgage.
“While the difficulties faced in getting on and trading up the housing ladder and the consequential rise in private renting is well documented, these figures show the scale of the change and challenges faced by government,” says Cook.
Total UK housing equity now stands at around £4.8trn net of borrowing, equivalent to over 2.7 times the GDP of the UK.
In the past ten years the total value of UK homes has risen by over £1.6trn, with £1.2trn in the last three years.
Cook added: “Average housing costs in London are now twice the UK average, which is a threat to its competitiveness and makes other major urban locations look increasingly attractive by comparison.”
St Albans, Reading, Wokingham and Milton Keynes also saw strong growth, a reflection of how price growth has become refocused to the commuter zone.
Beyond London, Bristol was the standout performer in 2015, with the total value of its housing stock up £4.5bn, to £44bn, the biggest increase for any single local authority or unitary authority beyond London.
Birmingham and Manchester, the focus of much investment and policy attention, both saw stronger value growth than in 2014.