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UK’s private housing worth more than the fortunes of ALL the world’s billionaires

Homeowners are sitting on a record property fortune of £5.6tn after house prices jumped by more than 50% during the past 10 years, according to Halifax.

That’s greater than the annual GDP of the UK, France and Italy COMBINED. Or to put it another way, the UK’s housing market is worth more than the fortunes of the world’s 1,810 billionaires added together.

The total value of the UK’s privately-owned homes has jumped by £1.9tn since 2006 alone, according to mortgage lender Halifax.

On an individual level, the value of the average property has climbed by £67,845 in the past 10 years, to stand at £241,682.

And in the past year alone, the value of private housing stock has grown by £337bn.

Why is this happening?

The impressive jump in housing wealth has been driven by a combination of rising house prices and increased levels of homeownership.

Property values have soared by 51% since 2006, significantly outpacing the retail price index, which has risen by just 33% during the same period.

At the same time, the number of privately-owned homes has risen by 1.8m to stand at 23.1m.

Who does it affect?

London and the south east have seen the biggest increases in housing wealth, with strong price gains matched by rising numbers of households.

In the capital, the value of privately-owned housing has more than doubled from £655bn to £1.3tn since 2006, while in the south east it has risen by 61% to stand at £402bn.

The east and Scotland have also seen strong gains at 60% and 51% respectively.

But the north-south gap has widened during the past decade, with the value of private homes in southern regions rising by 70%, compared with a gain of just 27% in northern ones.

As a result, the south’s share of total UK housing wealth has increased to 62%, up from 55% in 2006.

Sounds interesting. What’s the background?

Even once outstanding mortgage debt is taken into account, the amount of equity in private housing still stands at £4.2tn.

Housing equity has increased by £1.6tn since 2006, despite the fact that outstanding mortgage debt has also increased during the same period.

But while money owed through mortgages has risen by £264bn, the value of privately-owned housing has soared by seven times as much, increasing by £1.9tn.

Nearly one in three homeowners also now owns their property outright with no mortgage debt at all.

Executive Durham Homes from Elite Estates and Lettings

On the first day back at work after the festive break, Prime Minister David Cameron announced another new scheme to get Britain building. Smaller developers will be able to buy sites in England with planning permission in place – with 40 per cent of the new-builds to be “starter homes” aimed at first-time buyers.

Direct commissioning has not been used on this scale since Margaret Thatcher started the regeneration of Docklands, the benefit is that it allows the government to assume responsibility for developing land, instead of large building firms.

Prime Minister David Cameron said it was a “huge shift in government policy. Nothing like this has been done on this scale in three decades, government rolling its sleeves up and getting homes built.”

The Labour party said he was using “rhetoric to hide his failure on new homes.” Shadow Housing Minister John Healey said the announcement did not promise new investment or affordable homes beyond those already announced.

‘Radical’ shift
Adding to Mr Cameron’s energy rush, Communities Secretary Greg Clark (left) said that the government was not only rolling up its sleeves but was “pulling out all the stops to get the country building.”
“We know that consistently 90% of people aspire to own their own home, and for many years now home ownership has been in decline,” he said.
He added that the eight biggest building firms accounted for 50% of the house-building market, and there was a need to involve smaller and medium-sized companies.

Homes for all

Downing Street said the move marked a “radical new policy shift”, with up to 13,000 homes set to be built on five publicly-owned sites in 2016 – with up to 40% being affordable “starter” homes.
The government wants to build 200,000 starter homes – to be offered to first-time buyers under 40 at a minimum 20% discount price – by 2020.
The discounts apply to properties worth up to £250,000 outside London, or £450,000 in the capital.

Where will they build?

A pilot for the scheme will start on five sites:
LONDON: Brownfield land at Old Oak Common, in north-west London
KENT: Former Connaught Barracks, in Dover
CAMBRIDGESHIRE: Ex-MoD land at Northstowe, in Cambridgeshire
SUSSEX: Former hospital site at Lower Graylingwell, in Chichester
HAMPSHIRE: MoD site at Daedelus Waterfront, in Gosport

Richard Donnell, Director of Research at Hometrack said, “One of the greatest challenges to growing housing supply has been the loss of capacity from small builders whose numbers have halved between 2007 and 2013. Only 2,710 are estimated to have been building in the last year. The barriers to small builders developing homes have risen with planning and finance risks limiting access to the market.”

“The Government needs as many types of builder as possible to meet its target to grow supply. While the number of homes announced today is relatively small it sends the message that smaller builders have an important role to play if we are to grow housing volumes.”

Rhian Kelly, CBI Business Environment Director, said, “This announcement by the Prime Minister, if successfully rolled out across the country, should be a real spur to our ability to build more homes.

“To move us closer to the 240,000 homes we need built each year, the Government must ensure we have a healthy and vibrant housing market, with a mix of tenures, including the Private Rental Sector, affordable and social homes to rent and buy, and home ownership.”