London housing value: total worth of homes in the capital drops by record £26.2bn

The total value of London’s housing stock recorded a £26.2 billion fall in 2018 — the first decrease since 2009, according to new analysis.

London’s housing stock is still worth £1.77 trillion — more than four times the combined value of homes in Birmingham, Manchester, Edinburgh, Glasgow, Cardiff, Bristol, Liverpool, and Sheffield.

The capital accounts for nearly a quarter (24.3%) of UK housing value, compared to a fifth a decade ago, despite comprising only a twelfth of the national housing stock, according to Savills.

“Brexit uncertainty is applying in London more than elsewhere,” said Lawrence Bowles, residential research analyst at Savills.

“It’s part of the cycle with optimism for the long term of the London housing market, notwithstanding short term doesn’t look as positive. 

“To some extent it’s good news for first-time buyers. Average house prices and total value of homes starting to reset a little bit. However, homeowners are reluctant to sell, everybody wants to sell at the top of the market. 

“At least until tomorrow and probably long beyond the meaningful vote, transactions will be down — you can get a deal but the number of homes on the market is going to be more limited.” 

National housing value reaches record levels

At a national level values were on the rise, the research found, with the total value of the UK’s housing stock reaching a record £7.29 trillion in 2018.

Despite a slowdown in the housing market amid Brexit concerns, the total value of UK housing stock increased by £190.3 billion, real estate adviser Savills found.

“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.

Some £137.7 billion of the increase in the value of housing stock last year was due to house prices going up — equating to a £4,800 price increase per home.

While 72 per cent of the increase in the value of housing stock last year came from house price increases, the remaining 28 per cent — or £52.6 billion was due to new homes being built.

Savills said this is the the highest proportion contributed by new housing development since 2011 and reflects the Government focus on building more new homes.

Within the £7.29 trillion total, the collective value of the private rented sector topped £1.5 trillion for the first time.

Across the UK, in percentage terms, Wales was the region showing the biggest gains in the value of housing stock in 2018, with a 6.3 per cent increase adding £13.4 billion.

The East Midlands (6.2%) and West Midlands (6.1%) followed closely behind.

In cash terms, the value of stock in the South East saw the biggest increase across the UK last year, with £29.9 billion added on the back of growth of 2.2 per cent.

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