Figures from property firm Savills showed that despite the drop, the value of housing remained £1.585 trillion higher than 2019, before the pandemic hit
The UK’s housing stock has seen its first annual decline in value since 2012 after some £27 billion was wiped off last year, per new analysis, amid higher mortgage costs and pressure on household finances.
Figures from property firm Savills showed that despite the drop, the value of housing remained £1.585 trillion higher than 2019, before the pandemic hit.
The overall value of homes across the UK came in at £8.678 trillion in 2023.
Lucian Cook, head of residential research at Savills, commented: Despite higher mortgage costs, the market’s resilience means UK housing continues to be a significant, and a comparatively secure, store of wealth.
Even after deducting outstanding mortgage debt of £1.652 trillion, our figures show that net housing wealth continued to surpass £7 trillion, he said.
He said: In 2023, the total value was supported by an £80 billion uplift from new housing delivery. But, more fundamentally, the market was insulated from interest rate pressures by a combination of more stringent mortgage regulation, the rising use of fixed-rate mortgages and the assistance provided by lenders to those in financial difficulty.
Savills said homes owned outright now account for around 40% of the total housing value.
Its analysis indicated that the value of homes held by owner-occupiers that were mortgage free increased £1.505 trillion over the past decade, compared to a £978 billion increase for mortgaged owner-occupiers.
Cook added: We continued to see people who benefited from the homeownership boom of the latter part of the 20th century joining the ranks of the mortgage-free in 2023. But at the same time, aspiring homeowners had to contend with a combination of high deposit requirements and rising mortgage costs last year.
He said: Meanwhile increased taxation and regulation have constrained supply in the private rented sector housing, despite increasing tenant demand.
