Property value has increased by 62% since 2002

Residential houses

Research from Halifax has shown that the value of privately owned property has increased by 62% in the ten years leading up to 2012.

The value of the UK’s housing stock, including both owner-occupied and privately rented houses, amounted to £2.57 trillion in 2002. By the end of 2012, the value had risen to £4.2 trillion.

During this period, the value of all mortgage debt rose by a staggering 88% – from £675 billion in 2002 to £1.27 trillion in 2012. This means that the percentage of debt owed on housing stock increased from 26.26% to 30.24% in those ten years.

However, the growth of housing stock far outstripped that of mortgage debt; £1.64 trillion compared to £595 billion. As a result, housing equity – the amount of a property’s value without any debt secured on it – rose from £189 trillion in 2002 to £2.9 trillion in 2012 (an increase of over £1 trillion).

According to Halifax housing economist Martin Ellis, the increase in the average value per property over the past decade is equivalent to over £71,000 per property.

The strongest house price gains were made in Scotland, where private housing stock increased in value by 115%, from £134 billion to £288 billion. This was followed by London, which saw an appreciation of 83% to £821 billion, and the North East, which saw an appreciation of 76% to £109 billion.

Implications of rising property values

If you are in the fortunate position to have bought your property in the years leading up to the house price peak in 2007–2008, things are probably looking quite good. The Land Registry’s house price index shows that prices have remained relatively static after a small increase following the economic downturn, but they are still far higher than the levels shown at the beginning of last decade.

For those who are trying to get on the property ladder now, things might not seem so sunny – but with lower deposit mortgages on offer from many lenders, 2013 looks to be an encouraging year for first-time buyers and investors.

This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.