The total value of property in the UK has now surpassed £6 trillion for the first time, as the property market as a whole continues to attract investment by growing continually and going from strength to strength.
According to the latest data released this week by Savills, a swell in the overall value of homes amounting to some £385 billion in 2015, thanks to large amounts of new investment, meant that the market reached new peaks in what it’s worth.
The amount of property owned by investors also appears to have grown significantly, as the Savills data claims that in 2015, the value of property owned by those who have no mortgage rose to more than £2 trillion for the first time in history.
Crucially, the private rented sector, which has grown faster than any other across the course of the last five years, also saw incredible swelling in its significance to the overall property market in 2015. Savills said that rental properties are now worth £1.2 trillion. This saw its impact on the market, rising from a quarter to account for 28 per cent of all homes, with 5.7 million new homes having been added to the sector since 2010.
What this means is that in the last five years alone, the value of property owned by those investing in the rental market has increased by 55 per cent, faster than any other arm of the property sector.
“While the very low cost of interest has suppressed the cost of ownership, the backdrop in terms of accessibility to mortgage debt means an increased proportion of total housing costs is being taken up by private rent,” said Lucian Cook, head of residential research at Savills.
In terms of geographical performance, Savills said some of the strongest performers in the past years have been those cities outside of London. Birmingham and Manchester, for example, have both been the focus of rental investment, policy action and regeneration in recent years.
This has meant that in 2015, both cities saw far stronger growth in property value than they did in 2014, largely due to new investment and development of purpose-built rental properties.