Rising UK house prices push up total value of housing wealth by nearly 8% in 2016

Estate agent Savills said London and south east property accounts for biggest chunk of housing wealth.

Savills said the UK's total housing wealth was worth £6.79tn in 2016Getty

The total value of the UK's housing stock is estimated to have been £6.79tn ($8.37tn, €7.85tn) in 2016, an almost 8% rise on the previous year. That is according to research by Savills, the estate agent.

Privately-owned housing wealth passed £5tn in value for the first time. London and the south east, where homes are most expensive, continued to dominate. The housing stock in this region totalled over £3tn.

"Over the past three years, low interest rates and strong consumer sentiment have combined to deliver very strong value gains," said Lucian Cook, head of residential research at Savills.

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"But we are unlikely to see this pattern repeated. Economic uncertainty in the short term and more rigorous stress testing of mortgage lending in the longer term, will hold back house price growth and limit the ability of future generations to accumulate housing wealth."

Zoopla, the property listings website, previously estimated the total value of the housing stock in 2016 to be £8.17tn, a 7.35% increase on the year before.

House prices in the UK will increase by 1% to 4% in 2017, according to a forecast by the mortgage lender Halifax. The average UK house price is £218,000, but will increase to between £220,000 and £226,000 over the coming year, Halifax predicted.

"Slower economic growth in 2017 is likely to result in pressure on employment with a risk of a rise in unemployment. This deterioration in the labour market, together with an expected squeeze on households' spending power, is likely to curb housing demand," said Martin Ellis, housing economist at Halifax.

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