London, January 15:

The booming property market has pushed the total value of Britain’s private homes to a record level, according to the country’s largest mortgage lender.

The annual housing stock review from the Halifax showed the UK’s private housing stock was worth £3.8 trillion in 2006, up by £410 billion or 12 per cent from the previous year. The rise is equivalent to four times the total budget for the UK’s National Health Service.

While underlying retail price inflation has only come to 14 per cent over the past five years, the value of residential housing has climbed by 78 per cent.

The latest figures will add weight to calls from campaigners and economists who argue for a tax on property or land price gains. Last year, for example, inheritance tax and stamp duty raised only £8 billion, just by two per cent of the annual rise in housing value.

The steep climb in property values means housing equity now significantly outweighs mortgage debt. While housing assets jumped by more than £400 billion, mortgage balances increased by less than a quarter of this.

“The UK’s household balance sheet is in good shape,” said Tim Crawford, economist at Halifax. “Total housing assets (£3.8 trillion) are now worth 3.5 times the overall level of housing debt. Ten years ago, 2.9 times was the equivalent figure.” A breakdown of the data revealed that Northern Ireland saw the strongest rise in the value of its housing stock over the past five years, up by 165 per cent.

The north saw the largest rise of the English regions, with a gain of 130 per cent over the same period. However, every region has experienced gains of at least 50 per cent since 2001.

Cities accounted for over one-third of the value of total housing wealth at £1.3 trillion. London makes up around half of that figure, helped by demand from City workers looking to spend their annual bonuses. But northern cities have seen the sharpest rises in recent years, with Lincoln, Kingston-upon-Hull and Salford leading the way.

Despite robust price rises in London and the south-east, the report said the north-south housing wealth gap had narrowed in the past five years. In 2006, the south accounted for 55 per cent of total housing assets, compared with 62 per cent five years ago.

However, the Halifax said the north-south divide had held steady during the past year.