UK Housing Rises 84% In Value Since 2001

UK Housing Rises 84% In Value Since 2001

U.K. homeowners have seen the value of their property rise 84% on average in the past decade, despite a fall back since 2007, research by U.K. lender Halifax showed Saturday.

Halifax said the total value of U.K. residential housing stock held by owner occupiers and buy-to-let investors was GBP3.9 trillion in 2011. That's up from GBP2.1 trillion in 2001, meaning an average gain of GBP68,500 per household.

However, on the back of recent falls in house prices, the total value dropped from GBP4.0 trillion in 2010, and was also down from a recent peak of GBP4.1 trillion in 2007.

Housing equity--the value of properties held by their owners, rather than mortgage lenders--rose to GBP2.6 trillion in 2011 from GBP1.5 trillion 10 years earlier, the Halifax survey showed. Outstanding mortgage balances more than doubled over the period.

The U.K. housing market boom began in the mid 1990s. Barring a minor setback in 2001 it continued until the global credit crunch, which began in earnest in late 2007 when U.K. lender Northern Rock collapsed.

During the boom lenders became known for loosening their criteria, offering to lend mortgage applicants higher multiples of their income against small deposits. The credit crunch prompted a sharp reversal of that trend as lending criteria were rapidly tightened.

House prices initially slumped but since mid-2009 have been treading water, helped by a stabilization in the U.K. economy and a low rate of forced selling.

The Halifax's latest survey shows that more Britons expect house prices to rise than fall this year, despite an uncertain economic outlook that includes the ongoing euro zone debt crisis and the government's strict austerity drive.

Halifax economists don't share that view. "Looking forward, we currently expect broad stability in house prices in 2012, although there remains much ambiguity around this given the considerable uncertainty regarding the prospects for the U.K.," said Martin Ellis, a housing economist at the company.

The latest Halifax data showed house prices rising 0.6% in January from December, to an average of GBP160,907. That represents a fall of 1.8% compared with January 2011.

Halifax is a division of Lloyds Banking Group PLC (LYG).

source: Fox Business