A new report from Halifax shows the extent of the deep divide in property prices between the north and the south of the UK.
The total value of all private homes in London has been calculated by the mortgage lenders at £1.13 trillion, while the combined value of properties in Wales, Scotland and Northern Ireland is just over half of that in the capital, at £582 billion.
London ‘s property now has the same value as all of the property in the north-east and north-west of England, as counties Yorkshire and Humberside, and the whole of Scotland, put together.
Even when calculated with mortgages in mind, and despite the fact that, in general, mortgage values were higher in the south, London came out on top. Net equity in the average London household is currently at £306,000, according to the study. This is rather significantly higher than the £84,000 in Northern Ireland, and £94,000 in England ‘s north-east.
The report showed that the total value of all private housing in the UK has breached £5 trillion, up rather significantly from £3.3 trillion ten years ago. This amounts to an increase or some £76,000 per UK household ñ though this figure as a raw average is somewhat misleading given how much of the increase in value has landed in the pockets of private landlords rather than conventional homeowners. This is important as the recent surge in buy-let mortgages that we have seen has pushed down the owner-occupation rate in the UK from 70% in 2005 to under 65% today.
What the report also showed is how far house price growth, at 53%, has outstripped CPI inflation, at 35%. Mark Carney was forced to explain to the chancellor in writing last week why inflation has been as low as it is (currently estimated at 0.1% rather than the government ‘s target of 2%).
Further demonstrating the north-south divide, in that same ten year period between 2005 and 2015, property prices in the south of the UK have gone up by 66%, while in the north the increase is just over half of that, at 36%.
The fact that the south now accounts for 61% of the UK ‘s total property assets value, having gone up from 56% back in 2005, serves as arguably the final nail in the coffin in terms of making clear the fact that the divide between the two ends of our country in this respect is growing.
When the ONS reported that 44% of people in the UK believed that property would be where they would make their money in the coming years, it seems that they must have been asking Londoners.