A major factor that has increased property prices has been the shortage of homes to sell to match demand in many areas. And despite the increase in property prices to ‘new all-time highs’, the typical mortgage payment has ‘not been high’ by historic standards compared to take-home pay, largely because mortgage rates have remained close to all-time lows.
Understanding the value of your home, and the equity you hold within the property, will help when it comes to making future plans. According to latest research, the total value of British homes has soared by 20% in the past five years.
That’s a staggering £1.6 trillion, around the same figure as the market cap of Apple – the world’s most valuable company. It means that almost
12 million homes have jumped in value by the national average of £49,000 or more since 2016.
The total value of homes in Britain now stands at a staggering £9.2 trillion. To put this figure into perspective, it’s more than four times the GDP
of the UK – the value of all goods produced and services provided each year. And it’s more than four times the value of all the companies listed on the FTSE 100.
House price growth since 2016 has been underpinned by ultra-low mortgage rates. And since the COVID-19 pandemic, buyer demand has increased significantly as many people reassess what they want from a home. But this demand has been met by only a limited supply of homes for sale, fuelling house price growth.
The steep increase in property prices means your home could be worth more than you think. So if you are thinking of moving, you may have more money for your next purchase than you realised. Even if you plan to stay put, you could qualify for a cheaper mortgage, as you will be borrowing a lower proportion of its value.
The research highlighted that homes in the South East have seen the biggest increase in value over the last five years, collectively rising by £294 billion. By comparison, homes in London saw £214 billion added to their value over the same timescale.
Even so, London is the most valuable region, with homes in the city collectively worth
£2.4 trillion. It means that although the capital accounts for just 13% of British properties, it is home to a quarter of Britain’s housing wealth.
The South East has the second highest value of homes at £1.7 trillion, followed by the East of England at £1 trillion. But at the other end of the scale, homes in the North East are collectively worth £197 billion, while those in Wales are valued at £308 billion.
More than two-thirds of homes in 53 of the country’s 367 local authority areas have risen by more than £49,000 since 2016. Monmouthshire tops the list, with 88% of homes increasing by more than the national average. It’s followed by Hastings at 83% and Trafford at 82%.
 Zoopla Research conducted in October 2021. Data is based on values provided by Zoopla’s Automated Valuation Model (AVM) which carries out monthly valuations to provide the best indicator. The above data is from July 2021 (the most recent available) and compared to AVMs in July 2020 and 2016. The information and data in this report was correct at the time of publishing and high standards are employed to ensure its accuracy.
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Irrespective of whether you are looking to buy a new home, re-mortgage an existing property, or looking to protect your family from the unpredictability that life throws at it or protect your income if you are unable to work due to accident or ill health.
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