[ad_1]
The total cost of housing in the UK jumped 51% to a record £8.7 trillion last year, Savilles says, but adds that the increase “will represent the highest level in the national housing stock” in several years.
Homes in the UK grew by £425bn in 2022 compared to last year, less than in the previous two years but still contributing a 23% rise in value compared to 2019.
“The rise in house prices over the past three years has greatly increased the paper wealth of homeowners, helped in no small part by the well-documented ‘race for space’ over this period,” says Lucien Cook, Head of Residential Real Estate Research. in Savills.
According to the real estate agency, the biggest beneficiaries of this growth were owner-tenants.
It says that almost 40% of the rise in home values over this period was due to those who paid off their £645bn mortgages, while homeowners with mortgages accounted for 34% of the increase, or £549bn.
Cooks notes: “Not only are we still seeing the people who benefited from the homeownership boom in the second half of the 20th century join the ranks of non-mortgage loans, but there is also a modest recovery in the number of mortgaged homeowners due to rising new customer activity. for this period.”
But, he adds, over the past five years, landlords have come under pressure “due to increased regulation and taxation, despite growing demand from tenants.”
Savills estimates that between 2012 and 2017 the value of private rental property rose by £495bn, more than the £443bn increase in the value of mortgages.
But in the five years to the end of 2022, the value of private rental property rose by a much smaller amount, to £222bn, while mortgaged homes added a total of £669bn.
The agent adds that over the next “four to five years” the value of homes could decline due to the cost and availability of finance, coupled with lower levels of housing construction.
Cook says: “The latest HMRC data shows that the peak of shopping activity is in people over 30 years old, with under 45 years old accounting for 59% of all purchases.
“While the purchasing power of older buyers is more determined by the accumulated capital in housing, younger buyers need financing, which means that mortgage markets are the engine of the housing market.”
“The recent increase in interest rates will continue to put pressure on the budgets of first and second step buyers in 2023 and 2024.
He adds: “Combined with the prospect of lower levels of housing construction, we expect 2022 to be the highest point for the national housing stock in several years.
“At the same time, activity among younger buyers, which has improved in recent years, is likely to come under more pressure, which will pose a particular challenge to policy makers.”
Savills has taken its data from the latest Bank of England reports, which show mortgage loans outstanding at £1.7 trillion, meaning home net worth topped £7 trillion for the first time last year.
[ad_2]
