The total value of all UK homes broke the £8 trillion barrier in 2021, reaching £8.4 trillion, a new record high.

This means UK housing value rose by £804 billion in 2021 (+10.6 per cent), from the previous high of £7.61 trillion in 2020. 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 or £3.6 trillion over the past decade.

Why did this happen?

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 throughout the pandemic. Many reassessed what they wanted in response to increased working from home and the need for more inside and outside space.

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.

Where was the change greatest?

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. As a result, regional markets outpaced London in 2021, driven by a surge in demand for larger homes, for coastal and for country properties.

In England, the South East saw the greatest 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.

However, the North and the Midlands topped the chart for percentage uplift, with the total value of each region increasing by +11.4 per cent and 11.5 per cent respectively.

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

We could see this shift over the next five years with early signs showing that the north-south divide is set to steadily close, due to the greater capacity for growth in the North. The Government’s levelling-up agenda also has the potential to accelerate a rebalancing of the market, but only if it gains meaningful traction.

Further information

Contact Lawrence Bowles

Savills Residential Research