Britain's 30mln homes hit a combined value of £8.68trn at the end of 2022, having collectively increased by £425bn during the year, according to real estate firm Savills.
Mortgage debt made up £1.66trn of this, 11% higher than in 2021, it added, with net housing wealth surpassing £7trn for the first time.
Almost half of this - £3.34trn - was held by mortgage-free homeowners, who have been the “major beneficiaries” of the surging value of UK housing, which is now worth £1.6trn more than in 2019.
Younger and first-time buyers will likely be squeezed in the coming years though, given higher interest rates, the report said.
This presents a “particular challenge for policymakers,” commented Savills' research head Lucian Cook, with squeezed budgets and potentially fewer houses being built set to stem value growth as uncertainty builds.
Cook added that mortgages were the “engine room of the housing market,” with the bulk of loan-free homeowners' wealth tied into already-owned property.
“Though mortgage borrowing equates to less than a fifth of the nation’s housing stock value, the cost and availability of that debt will be crucial to the shape of the housing market over the next four or five years,” Cook said.
The value of privately rented housing has also become sluggish recently, rising by just £222bn between 2017 and 2022, compared to £495bn in the five years beforehand.
As a result, 2022 will likely represent a “high watermark” for UK housing in the coming years, Cook predicted, with prices already having teetered in the past fourth months, climbing just £14 in February, as per Rightmove data.