Housing stock worth £4 trillion

The value of residential property in the south east has grown by 192%

The value of the UK's private housing stock rose by an estimated 9% in 2007 to reach £4 trillion, says the Halifax.

That figure has more than tripled over the last decade, rising by 208% from £1.3 trillion recorded in 1997.

In contrast, the headline rate of inflation (RPI) has increased by 31% over the same period.

Despite fears about slowing UK property prices, the bank says the housing stock is worth more than three times the country's outstanding mortgage debt.

It says housing assets have grown by more than mortgage debt levels in every year since 1995.

UK home owners have collectively accumulated an extra £2 trillion of equity in their homes Martin Ellis, chief economist, Halifax

At the same time, the amount of equity held by homeowners - the value of housing assets minus outstanding mortgage balances - has also risen sharply, with an average annual increase of £185bn over the past five years.

The Halifax calculates that booming house prices have meant overall household wealth has more than doubled in the last decade, rising from £3.3 trillion in 1997 to £6.7 trillion in 2007.

"UK home owners have collectively accumulated an extra £2 trillion of equity in their homes over the past decade as property prices have risen," said the bank's chief economist Martin Ellis.

"This has significantly strengthened the household balance sheet.

"Mortgage debt accounts for only 30% of the value of the UK's £4 trillion worth of housing assets," he added.

This could offer some insulation to homeowners should, as is widely predicted, the housing market continues to slowdown in 2008.

Regional picture

The research, based on data from the Halifax's own house price survey, the Department for Communities and Local Government, the Scottish Executive and the Welsh Assembly, shows that housing assets have grown by at least 180% since 1997 in every region of the UK.

VALUE OF HOUSING BY REGION North: £122bn Yorks and the Humber: £248bn North West: £354bn East Midlands: £238bn West Midlands: £317bn East Anglia: £367bn South West: £397bn South East: £746bn Greater London: £685bn Wales: £171bn Scotland: £247bn Northern Ireland: £123bn Source: Halifax

The largest increases over the decade were in Northern Ireland (404%), Wales (223%) and the South West (222%).

According to the Halifax, England's north-south housing wealth gap remains, but has narrowed in the last five years.

In 2002, the north accounted for 39% of the UK's housing assets, and the south 61%.

By 2007, the north's share had risen to 45%, meaning the south's had fallen back to 55%.

But more than a third (36%) of the value of the UK's private housing assets remains concentrated in the South East (19%) and Greater London (17%).

Scotland saw the biggest percentage increase of any region during 2007, with the value of housing stock rising from 16% from £213bn to £247bn.

Northern Ireland had the second largest rise of 15%, making its housing stock worth £123bn.

Property slowdown

The research comes amid widespread evidence that the property market is continuing to decline, in part as a result of the five interest rate rises seen in the twelve months to last July.

The most recent publication from the Halifax's own house price survey offered further confirmation that the market is still weakening.

The country's biggest mortgage lender said prices were rising at an annual rate of just 5.2% in December, half the rate seen just three months earlier.

Nationwide's house price index for the same month showed an even smaller annual price increase of 4.8%.

Both the Halifax and Nationwide predict a further slowdown in 2008, and with further interest rate cuts likely.

The Bank of England's Monetary Policy Committee (MPC) voted unanimously to chop interest rates from 5.75% to 5.5% at its December meeting.

The MPC decided to hold rates earlier this month, but many economists expect it to cut again very soon, possibly as early as next month.