Value of UK homes increased by a tenth
(14 January 2008)

The UK's homes are now worth a total of £4 trillion, according to new research.

The study by Halifax revealed that the value of UK homes has increased by over nine per cent in the past decade.

Housing equity- the value of housing assets minus outstanding mortgage balances- stood at £870 billion in 1997.

"UK homeowners have collectively accumulated an extra £2 trillion of equity in their homes over the past decade as property prices have risen," said Martin Ellis, chief economist at Halifax.

Mr Ellis added that this has significantly strengthened the household balance sheet, as mortgage debts account for only 30 per cent of the UK's £4 trillion housing assets.

The research also showed that the biggest growth in property values since 1997 was recorded in Northern Ireland, which saw increases of 404 per cent.

Meanwhile, the Bank of England's decision to hold interest rates at 5.5 per cent is "not all doom and gloom" for home buyers, according to Leeds Building Society.

A spokesperson for the bank said that new borrowers are "already benefiting from cheaper fixed-rate mortgage products as swap rate".