Valuing Britain part 2
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The document analyzes housing wealth and debt levels across the UK from 2001-2013. Some key points: - Total UK mortgage debt reached £1.27 trillion in 2013, equal to 24% of total housing value, up from 21% in 2003 but similar to recent years. - London has the lowest debt levels relative to private housing value of all regions at 22%, while the North West is highest at 29%. However, London holds over £900 billion more equity in privately owned housing than Scotland, Wales and the North of England combined. - Among owner-occupiers with mortgages, debt has risen to over half the value of housing in recent years, standing at 54% in 2013 compared to 43
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Valuing Britain part 2
- 1. Valuing Britain Part II Housing Wealth Across the UK January 2014 1
- 2. Dull but important stuff Debt based on CML figures recently released at a postcode district level: aggregated up to local authority and region; and increased to match UK data from the Bank of England; Debt divided between different sectors have regard to Bank of England / CML data 2 Source: Savills Residential Research, Valuing Britain January 2014
- 3. Levels of mortgage debt Total mortgage debt of £1.27 trillion equates to 24% of the total value of UK housing up from 21% ten years ago but similar to levels seen in the past five years. Still less than a quarter of the value of UK housing is backed by debt. 3 Source: Savills Residential Research, Valuing Britain January 2014
- 4. Equity in the market £ billion Total Value of All Housing Outstanding Mortgage Debt 2001 2,390 591 2002 3,059 675 2003 3,622 775 2004 4,317 877 2005 4,497 967 2006 4,952 1,079 2007 5,549 1,187 2008 4,976 1,226 2009 4,782 1,236 2010 5,025 1,240 2011 4,927 1,246 2012 5,019 1,266 2013 5,205 1,270 Total Value of All Housing Outstanding Mortbage Debt % Mortgage Debt 30% 5,000 25% 4,000 20% 3,000 15% 2,000 10% 1,000 5% 0 £ billion 6,000 0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 4 Source: Bank of England, Savills Residential Research, Valuing Britain January 2014
- 5. Debt by sector Levels of debt set against private rented sector property have increased from 9% of value to 17% of value over 10 years, given the growth of the buy to let mortgage market. In the owner occupied market where debt is a much more prevalent overall, it accounts for 27% of the value of housing. 5 Source: Savills Residential Research, Valuing Britain January 2014
- 6. % debt by sector Owner Occupied PRS Social Housing 30% 25% 20% 15% 10% 5% 0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 6 Source: CML, Savills Residential Research, Valuing Britain January 2014
- 7. Analysis of Equity Whilst the total amount of equity held in housing has risen by £1.09 trillion over the past 10 years, the amount of equity held by the occupiers of property has risen by less than half that amount, £498 billion. The proportion of the value of UK housing stock held by the occupiers of that property as equity has fallen from 59% to 51% over the past ten years. The proportion of equity in UK housing held by its occupiers has fallen from 75% to 67% over 10 years (i.e. From three quarters to two thirds). £ billion 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Owner Occupiers Unmortgaged Equity 794 1,026 1,227 1,473 1,533 1,684 1,888 1,697 1,634 1,719 1,690 1,719 1,783 Owner Occupiers Mortgaged Equity 542 760 915 1,117 1,109 1,196 1,333 1,025 898 941 861 832 856 PRS Equity 261 334 384 452 474 533 620 573 590 672 689 749 818 Social Housing Equity 130 170 207 255 266 295 331 291 269 286 277 283 296 Other Equity 70 95 115 142 148 165 190 163 155 167 164 171 182 1,798 2,383 2,848 3,440 3,530 3,873 4,362 3,750 3,546 3,785 3,680 3,753 3,936 Total 7 Source: Savills Residential Research, Valuing Britain January 2014
- 8. Occupiers Equity Occupiers Equity Occupiers Equity as a % of Total Value Occupiers Equity as a % of all Equity 3,500 80% 3,221 2,880 3,000 2,723 2,590 2,641 75% 2,532 2,660 2,550 2,551 2,639 2,500 70% £ billion 2,142 2,000 1,500 65% 1,785 60% 1,336 1,000 55% 500 50% - 45% 2001 2002 2003 2004 2005 2006 2007 8 2008 2009 2010 2011 2012 2013 Source: Savills Residential Research, Valuing Britain January 2014
- 9. Debt among mortgaged owner occupiers Amongst those owner occupiers with a mortgage, debt has risen to more than half of the value of housing in the past five years - despite banks’ reluctance to lend. It currently stands at 54% of the value of mortgaged housing stock compared to 43% 10 years ago. 9 Source: Savills Residential Research, Valuing Britain January 2014
- 10. Owner occupied mortgage debt Owner occupied mortgage debt % of value of all owner occupied stock % of value of mortgaged owner occupied stock 60% 1,000 50% 800 £ billion 1,200 40% 600 30% 400 20% 200 10% 0 0% 2001 2002 2003 2004 2005 2006 2007 10 2008 2009 2010 2011 2012 2013 Source: Savills Residential Research, Valuing Britain January 2014
- 11. Analysis of Equity Within the owner occupied market the equity held by those without a mortgage was one third higher than that held by those with a mortgage 10 years ago, it is now over double. 11 Source: Savills Residential Research, Valuing Britain January 2014
- 12. Owner Occupiers Equity Owner Occupiers Unmortgaged equity Owner Occupiers Mortgaged Equity Ratio Unmortgaged v Mortgaged Equity among Owner Occupiers 2,000 220% 1,800 200% 1,600 180% 1,200 1,000 160% 800 140% 600 1,783 856 1,719 832 1,690 861 1,719 941 1,634 898 1,697 1,025 1,888 1,333 1,684 1,196 1,533 1,109 1,473 1,117 1,227 915 200 1,026 760 400 794 542 £ billion 1,400 - 120% 100% 2001 2002 2003 2004 2005 2006 2007 12 2008 2009 2010 2011 2012 2013 Source: Savills Residential Research, Valuing Britain January 2014
- 13. Debt and equity across the regions London has the lowest levels of debt, relative to the value of privately held stock of all of the regions, at 22%. The total level of equity held in privately owned housing in London is over £900m more than that held in Scotland, Wales and the whole of the North of England combined. 13 Source: Savills Residential Research, Valuing Britain January 2014
- 14. Debt & equity in private stock £bn (excl. social housing) £ billion Value Debt Equity % Debt % Equity LONDON 1,151 250 902 22% 78% SOUTH EAST 908 233 675 26% 74% EAST 498 131 367 26% 74% SOUTH WEST 461 106 355 23% 77% NORTH WEST 372 107 266 29% 71% WEST MIDLANDS 316 84 232 27% 73% YORKSHIRE AND THE HUMBER 276 76 200 27% 73% SCOTLAND 276 75 200 27% 73% EAST MIDLANDS 257 72 185 28% 72% WALES 166 42 123 26% 74% NORTH EAST 115 34 81 29% 71% 14 Source: Savills Residential Research (using CML data), Valuing Britain January 2014
- 15. Debt and equity across the regions But given levels of private renting in London, there is slightly more housing equity amongst owner occupiers in the South East (£524 billion). 15 Source: Savills Residential Research, Valuing Britain January 2014
- 16. Debt & equity in owner occupied stock £bn Value £bn Debt £bn Equity £bn % Debt % Equity SOUTH EAST 721 197 524 27% 73% LONDON 692 178 515 26% 74% EAST 398 112 286 28% 72% SOUTH WEST 350 85 265 24% 76% NORTH WEST 290 90 200 31% 69% WEST MIDLANDS 252 72 181 28% 72% SCOTLAND 236 69 168 29% 71% YORKSHIRE AND THE HUMBER 212 63 149 30% 70% EAST MIDLANDS 205 61 143 30% 70% WALES 128 35 93 27% 73% NORTH EAST 89 29 61 32% 68% 16 Source: Savills Residential Research (using CML data), Valuing Britain January 2014
- 17. London housing equity London’s housing equity is heavily affected by that held in central London. The privately owned housing equity held in the two boroughs of RBKC and Westminster account for: 20% of that in the capital; and Nearly 12 times that in the boroughs of Newham and Barking and Dagenham. 17 Source: Savills Residential Research, Valuing Britain January 2014
- 18. 18 19,183 19,400 20,200 21,044 21,251 22,798 25,012 25,370 25,773 27,873 28,327 17,175 17,249 15,041 15,361 16,053 5,382 10,444 12,869 14,171 2,692 31,435 31,873 32,535 32,612 18,383 20,000 16,234 44,067 46,832 35,531 40,000 48,298 60,000 90,105 91,027 100,000 Westminster Ken'ton & Chelsea Wandsworth Camden Barnet Richmond Ealing H'smith & Fulham Haringey Bromley Lambeth Merton Islington Southwark Brent Croydon Hounslow Enfield Harrow Hackney Redbridge Hillingdon Tower Hamlets Lewisham Kingston Greenwich Havering Waltham Forest Sutton Bexley Newham Barking & D'ham City of London Privately held housing equity in London £m 120,000 80,000 - Source: Savills Residential Research, Valuing Britain January 2014
- 19. Equity rich and debt reliant markets In the most equity rich markets of the UK, mortgage debt typically accounts for less than 16% of the value of privately owned housing stock. In the most mortgage dependent markets it accounts for between 36% & 46% of the value of privately owned housing and between 40% & 50% amongst owner occupiers. 19 Source: Savills Residential Research, Valuing Britain January 2014
- 20. Equity rich and mortgage reliant markets 20 Source: Savills Residential Research (using CML debt data), Valuing Britain January 2014
- 21. Most & Least Equity All owner occupied stock % mortgage debt among owner occupied % mortgage debt among owner occupied Local Authority Region LONDON 8% Bracknell Forest SOUTH EAST 39% Westminster LONDON 9% Blackpool NORTH WEST 39% City of London LONDON 12% Burnley NORTH WEST 39% Eden NORTH WEST 12% Rushmoor SOUTH EAST 40% West Somerset SOUTH WEST 13% Hartlepool NORTH EAST 40% North Norfolk EAST 13% Luton EAST 40% Camden LONDON 14% Swindon SOUTH WEST 40% Ryedale YORKSHIRE&HUMBER 14% Knowsley NORTH WEST 40% West Dorset SOUTH WEST 15% Dartford SOUTH EAST 40% South Lakeland NORTH WEST 15% Harlow EAST 40% Allerdale NORTH WEST 15% Milton Keynes SOUTH EAST 40% Ceredigion WALES 15% Tower Hamlets LONDON 40% East Devon SOUTH WEST 15% Crawley SOUTH EAST 41% Suffolk Coastal EAST 16% Peterborough EAST 41% Dumfries & Galloway SCOTLAND 16% Northampton EAST MIDLANDS 41% South Hams SOUTH WEST 16% Corby EAST MIDLANDS 42% Purbeck SOUTH WEST 16% Thurrock EAST 43% Haringey LONDON 17% Barking and Dagenham LONDON 47% Gwynedd WALES 17% Newham LONDON 47% Scarborough YORKSHIRE&HUMBER 17% Slough SOUTH EAST 49% Local Authority Region Kensington and Chelsea Note: table excludes Isles of Scilly, Eilean Siar, Orkney Islands and Shetland Islands 21 Source: Savills Residential Research, Valuing Britain January 2014
- 22. Most & Least Equity Mortgaged owner occupied stock Local Authority Region % mortgage debt among owner occupied with a mortgage Westminster LONDON Kensington & Chelsea % mortgage debt among owner occupied with a mortgage Local Authority Region 22% Pendle NORTH WEST 68% LONDON 22% Neath Port Talbot WALES 68% Dumfries & Galloway SCOTLAND 28% Salford NORTH WEST 69% Haringey LONDON 28% Preston NORTH WEST 69% City of London LONDON 30% Newport WALES 69% Camden LONDON 31% Northampton EAST MIDLANDS 70% Eden NORTH WEST 32% Knowsley NORTH WEST 71% Hammersmith & Fulham LONDON 35% Thurrock EAST 71% Argyll & Bute SCOTLAND 35% Middlesbrough NORTH EAST 71% Islington LONDON 36% Boston EAST MIDLANDS 71% Hackney LONDON 36% Luton EAST 71% Allerdale NORTH WEST 36% Blackburn with Darwen NORTH WEST 72% Oxford SOUTH EAST 37% Hartlepool NORTH EAST 74% Highland SCOTLAND 37% Barking & Dagenham LONDON 74% Cambridge EAST 38% Peterborough EAST 74% Southwark LONDON 38% Slough SOUTH EAST 75% Suffolk Coastal EAST 38% Hyndburn NORTH WEST 76% Ryedale YORKSHIRE&HUMBER 39% Newham LONDON 76% South Lakeland NORTH WEST 40% Blackpool NORTH WEST 79% North Norfolk EAST 40% Burnley NORTH WEST 80% Note: table excludes Isles of Scilly, Eilean Siar, Orkney Islands and Shetland Islands 22 Source: Savills Residential Research, Valuing Britain January 2014