Housing values surge as more forced to rent

 
Julian Harris
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THE VALUE of residential properties in the UK has shot up in recent months according to a survey released yesterday, climbing in every region of the country.

Yet separate figures from the government show that the number of people in England who own their homes is on the decline, with growing numbers being kept in the private rental market.

And private renters typically have to spend far more on rent than home owners spend on mortgage payments, the Department for Communities and Local Government (DCLG) said.

The DCLG’s English Housing Survey for 2011-12, which published an updated bulletin yesterday, found that rental payments are on average 41 per cent of a tenant’s gross income. “Amongst owner occupiers, households typically spent 19 per cent of their gross income on mortgage payments,” it added, by contrast.

The average weekly rental payment is £164, compared with a mortgage payment of £141 per week, the survey has found.

And owners are benefiting from the rising value of their assets, figures from the website Zoopla showed.

The firm estimates that the housing stock grew by £156bn in value in the second quarter of the year.

“This was driven by a 2.56 per cent (£5,899) rise in the average property value over the second quarter, which took the average value of a property in Britain up to £235,912,” it said.

Activity in the housing market is set to overtake its 2007 peak, according to estate agent Connells. The firm said yesterday that valuations in the first half of the year were up one per cent compared to the same period in 2007.

However, real prices – adjusted for inflation – may not reach their 2007 peak until 2021, PwC will reveal today. The big four audit firm says real prices are down 18 per cent.

While government initiatives such as Help To Buy may boost the mortgage market in the short run, “longer term supply shortages remain a concern,” PwC will say.