The value of properties in the south-east of England is more than that of the combined value of properties in Wales, the Midlands, Yorkshire and the North, according to a survey conducted by property consultancy firm Savills.
The south-east region – including London, alone accounts for one third of the country’s total house prices, reflecting the huge disparity that exists in homeowner’s wealth across the country.
Surrey tops the chart among the counties, with total property wealth valued at £130 billion.
London’s richest borough is Chelsea and Kensington, part of the most affluent central districts with a total valuation of £63 billion. The borough commands a price of £50 million per hectare.
By the end of the boom period in 2007, all homeowners had benefitted with home prices increasing by £2,500 billion between 2000 and 2007.
The global meltdown had wiped out £600 billion in property values in 2008 and 2009. However, the unexpected rebound saw £600 billion worth of price recovery in 2010.
The survey shows that the new wealth has been essentially created by the older generations, who had paid off their mortgages and have seen their property prices rise since.
83 percent of the nations housing wealth is owned by owners aged above 45 while 40 percent of the nation’s home equity is owned by people aged over 65 years.
Lucian Cook, Director of residential research at Savills commented “The big question for the next decade will be how and if, this wealth will be redistributed to a younger generation”.
“It is little wonder then that we are a nation obsessed with the state of the housing market, but it is the distribution of that wealth that is likely to shape both the housing market, household formation and wider society going forward”.
The most heartening development though remains the low loan-to-value ratio of 30 percent. This means that on an average, 30 percent of the property value is funded by bank loan and the rest 70 percent has been funded by the owner.
The net value of property wealth has been estimated at £2,900 billion with total mortgage debt outstanding valued at £1,250 billion.