THE total value of all homes across the UK now stands at £8.678 trillion, with Scotland ‘outperforming’, according to new research by property firm Savills.
Faisal Choudhry, head of residential research for Savills in Scotland, said, “Scotland’s housing sector remains robust and resilient, with the value of housing stock continuing to rise against a backdrop of a marginal dip in the value of UK stock. Scotland’s growth comes down to comparative affordability, the relative value gap between Scottish locations and those south of the border, with room for further growth a result. Scotland has remained in demand as a place to invest in property from buyers from all over the UK.”
The analysis of the UK’s housing stock reveals the total value has fallen marginally on 2022 – when values peaked – but remains £1.585 trillion higher than pre-pandemic in 2019.
Lucian Cook, head of residential research at Savills, commented, “Despite higher mortgage costs, the market’s resilience means UK housing continues to be a significant, and a relatively secure, store of wealth. Even after deducting outstanding mortgage debt of £1.652 trillion, our figures show that net housing wealth continued to exceed £7 trillion; a figure 2.6 times the size of the UK’s economy.
“In 2023 the total value was supported by an £80 billion uplift from new housing delivery. But, more fundamentally, the market was insulated from interest rate pressures by a combination of more stringent mortgage regulation, the increased use of fixed rate mortgages and the assistance provided by lenders to those in financial difficulty.
“We may see the cost of mortgages ebb and flow over the course of 2024, as markets respond to changing expectations of when and how much the Bank of England will cut the base rate. But over the medium term we expect affordability pressure to ease, meaning that the recent loss in value should be short lived.”
According to Savills, the value falls were concentrated in the south. The total value of London’s housing stock decreased by -£39.3 billion (-2.1%), while the south east, south west and east of England saw a combined -£16.5 billion (-0.5%) fall.
By contrast, markets further from London which have a greater capacity for growth, saw values increase on the year. The most significant uplift was in Northern Ireland (3.2%), north east (1.4%), Scotland (1.3%) and the East Midlands (1.3%).
