The household balance sheet is in good shape. The total value of private sector housing assets was equivalent to around 3.2 times the value of total household debt in 2003, says the Halifax. Five years ago and also ten years ago the ratio was 2.7 times.

The value of the residential housing stock has also grown at a substantially faster rate than overall consumer prices. The core retail price index (RPIX) has risen by only 28% over the past ten years versus a more than 170% increase in the value of the housing stock.

Housing stock now worth £3.0 trillion

The new research from Halifax shows the value of the UK private residential housing stock rose by an estimated 15% in 2003 to £3.0 trillion, nearly double the level five years ago. Ten years ago the value of the residential housing stock was around £1.1 trillion.

All regions in the UK have seen the value of their residential housing stock rise by at least 85% over the past ten years. The value of the housing stock has risen the most in Greater London (247%) and the least in Scotland (87%) over this period.

Close to 40% of the value of the UK's private residential housing assets is concentrated in the South East and Greater London. Ten years ago, on the other hand, around a third of total housing asset value was located in these areas. However, the number of dwellings in the South East and Greater London is currently only 26% of the total.

Fast catching up

In the past year the North (£84bn), Yorkshire & the Humber (£168bn), along with Wales (£120bn) saw the largest rises in the value of their housing stocks, with increases of more than 25%.

Tim Crawford, Group Economist at Halifax, commented: “While in the late 90s most of the increase in the value of the housing stock was in the South East, it's important to realise that in recent years Northern England, Wales and Scotland have also seen substantial increases in the value of their housing stocks.”

“The rise in the value of housing assets has also had a significant positive impact on the health of household balance sheets. More than half of household wealth is derived from the value of residential property. Households and also policy makers should note that the increase in the value of housing assets has outpaced the increase in household debt over the past five years."