London still hogs property value despite ‘race for …

The total value of all UK homes broke the £8 trillion barrier in 2021 according to Savills – and London is still easily the most valuable location.

UK housing value rose 10.6 per cent by £804 billion in 2021 – this is the fastest annual percentage growth since 2006, and the biggest annual increase in value ever recorded. 

In total, the value of UK housing has grown by 75.7 per cent over the past decade.

“The stamp duty holiday and low interest rate environment created extremely strong market conditions in 2021, encouraging many to move who perhaps wouldn’t have otherwise. But, over and above that, people’s lifestyle needs and housing preferences hugely shifted over the course of the pandemic, with many reassessing what they want out of their living environment in response to increased working from home and the need for more inside and outside space” according to Lawrence Bowles, a director in the Savills residential research team.

“A surge in demand for the best homes in hotspots across the UK led to a record number of housing transactions, and significant house price growth in many areas. As a result, we experienced an exceptionally strong year, which has pushed the value of the UK’s housing stock to another record high.”

Changes in housing value reflect the pattern of moves, with households moving from smaller, urban properties in search of more space in the suburbs and beyond.

In England, the South East saw the greater increase in housing value in 2021, rising by £155 billion or 10.9 per cent followed by the North (£131 billion) and London (£130 billion). Scotland, Wales and Northern Ireland grew by a combined £98 billion.

Despite being home to less than half of all housing stock (44 per cent), London and the South still hold the majority (62 per cent) of the total value UK housing stock. 

Locations that gained the most value over the past year are Cornwall (£16.2 billion), Edinburgh (£12.5 billion), and Westminster (£11.3 billion). 

 

“Regional markets outpaced London in 2021, driven by a surge in demand for larger homes, for coastal and country properties. This, combined with a shrinking supply of stock, created pockets of extremely strong market conditions” adds Bowles. 

“The north-south divide in house prices looks set to close further over the next five years, further bolstering values outside of London. Not only is there more capacity for price growth in the North, but there also remains more of an affordability cushion. 

“The government’s levelling-up agenda has the potential to accelerate a rebalancing of the market, but only if it gains meaningful traction.”

https://www.estateagenttoday.co.uk/breaking-news/2022/1/london-still-hogs-property-value-despite-race-for-space