Houses in London's 10 most expensive boroughs are now worth as much as the property markets of Wales, Scotland and Northern Ireland combined, underlining the extent of Britain's growing wealth divide.
London houses have traditionally fetched higher prices than those elsewhere in the country. However, the financial crisis has triggered a rapid polarization of the market, with property values falling in every region of the U.K. other than the capital.
The swing towards London and a few surrounding commuter towns, underpinned by rampant demand from overseas buyers, means the property wealth of small, rural districts close to the capital has outgrown that of the U.K.'s largest cities. For example, the total housing stock in Elmbridge, a Surrey borough popular with City workers, is worth more than the entire property value of Glasgow.
Lucian Cook, director of residential research at Savills, the property consultancy that compiled the figures using the 2011 Census and Land Registry data, said the divergence in values would have "dramatic" and "long-term impacts on mobility of labor as well as the pace and distribution of economic recovery".
"More housing wealth is being concentrated in fewer people's hands. That restricts the ability of some groups – particularly younger generations – to get on to, or trade up, the housing ladder, creating longer-term implications on the lifetime cost of housing."
Since 2007, house prices in London have risen 15 percent. The increase alone, worth 140 billion pounds, is a sum larger than the value of all residential property in the northeast of England. The 10 most expensive boroughs in London, which include Camden and Richmond, have a combined property value of 552 billion pounds – identical to that of Wales, Scotland and Northern Ireland.
Even within London, there is huge disparity – with the central boroughs of Westminster and Kensington & Chelsea both worth more than 90 billion pounds, an increase of close to 50 percent on 2007, giving them a combined housing wealth greater than Wales.
The worst affected area of the country during the financial crisis has been Northern Ireland, where the value of the housing stock has fallen by more than 50 percent to 72 billion pounds. The decline means the province's property worth is only slightly higher than the south London borough of Wandsworth.
"It makes it increasingly difficult to have a sensible national housing policy," said Ian Fletcher, director of policy at the British Property Federation, "because we are clearly moving into a two-speed market". He added that the falling prices in much of the U.K. would engender the growth of institutional rented housing as people stopped betting on the property market.
The housing boom in London has been fueled by an influx of wealthy buyers from Asia, the U.S. and Europe, many of them seeking a so-called "haven" investment away from the turmoil roiling the global financial markets.
Boris Johnson, London's mayor, has already raised with the Treasury the idea of London local authorities collecting the 1.3 billion pounds of stamp duty tax generated last year by properties in their boroughs and using it for public services and affordable housing.
Enclave worlds away from Ibrox
The 5 million-pound price of a home in Surrey's most expensive enclave would buy a whole street of properties in the Ibrox area of Glasgow, not far from the city center, where one-bedroom flats sell for as little as 22,000 pounds, James Pickford reports.
The properties in the borough of Elmbridge, which includes St George's Hill, are also worth more than all the homes in Scotland's largest city.
But what does this mean for a family with 500,000 pounds to spend? Not as much as the data suggest. In Glasgow's elegant Queen's Square, a Victorian house on sale for 490,000 pounds has four bedrooms and period features such as "cornicing, traditional fireplaces and paneled doors".
It is also possible to buy a four-bedroom house in Weybridge for 500,000 pounds, albeit on a smaller scale. In one brick-built house on Hillcrest, the bedrooms are decidedly smaller and the garden described as "easily maintained."