The value of London’s housing is on the brink of bursting through the £2 trillion barrier, according to new research today.
Despite a flat market London’s housing stock was worth £1.992 trillion, up £31 billion, says the analysis from agents Savills. That is equivalent to the annual GDP of a country the size of Canada.
For the UK as as whole the total value now stands at £9.1 trillion , or 3.5 times the annual GDP of the UK
Unmortgaged housing stock is the largest tenure by value worth £3.42 trillion and the fastest growing - up by 66% over the past 10 years.
Last year marked a return to growth - adding £346 billion - after the value of the UK’s housing stock fell in 2023 for the first time since 2011.
Lucian Cook, head of residential research at Savills said: “With the Bank of England expected to cut interest rates further over the coming months, we anticipate an increase in transactional activity, particularly among second-steppers who have held off moving until rates fall. While first-time buyer activity is expected to be boosted by planned reforms to mortgage rules.
“This in turn should lead to further upward pressure on values, mitigating any impact that increased taxation and regulation will have on the PRS sector, as well as lower levels of housebuilding.”
According to Savills, growth has been much more evenly distributed across UK regions over the past two years, with the value of housing in the north increasing in the north by more than south.
The north west, Scotland, and Yorkshire and the Humber have each added at least £37 billion to the value of their housing stock since 2022, exceeding the £31 billion growth seen in London.
Over the last decade London and the South East have grown relatively slowly in percentage terms, but have still added the most value in raw terms, at more than £1.2 trillion.
Dan Hill, research analyst at Savills, said: Regional markets that are less reliant on debt have more capacity for growth and therefor remained the most robust.
“Despite this, vast housing wealth remains concentrated in pockets in London and the South East. These two locations alone still account for more than 40% of the total UK housing value, even though they are home to just 26% of housing stock.”
Owner-occupier stock dominates in most regions, but in London, the private rental sector has the most value at £617 billion, worth more than all the housing stock in Scotland, combined.
