Property values up £39.1bn

The total value of UK homes has increased by £39.1bn this year.

Research from property website Zoopla.co.uk revealed the increase, which may be modest in historic terms but is a huge turnaround from 2008, when total residential property values lost £811.3bn.

The total value of UK homes is now at £5.3 trillion, which is still more than three quarters of a trillion pounds below its peak of £6.1 trillion in late 2007.

According to Zoopla’s figures, the average UK home is now worth £205,591, an increase of £1,517 (0.7%) from one year ago, a daily gain of £4 for the average property.

This is in contrast to 2008 when property values fell by £31,355 (13.3%) on average, equivalent to a daily loss of £86 per property.

Property prices in England have risen by 0.9% over the last year, following a fall of 13.9% in 2008.

Scottish house prices increased by 0.6% this year to an average of £156,905, up from £155,597 at the end of 2008.

However, the property market in Wales is yet to rebound and has seen average values drop a further 2.5% (£3,866) in 2009 on top of the 13.2% decline in 2008.

Homeowners in Gloucestershire saw the biggest rise in values in 2009 with average prices going up by 3.8% over the past year to a current average of £229,945.

Merthyr Tydfil saw the biggest fall in property values, dropping 6.2% to a current average value of £94,132.

Nicholas Leeming, commercial director of Zoopla.co.uk, said:

“2008 was undoubtedly the annus horribilis for homeowners. But, property prices have stabilised this year, rising gradually since April after a fairly weak first quarter. We are still a long way from the values seen before the recession took hold, but the housing market has not worsened in 2009 as some had feared and recovery signs are starting to take hold.

"With the biggest share of the UK’s household wealth - 39% - in property, it is far better news for homeowners this Christmas than last with their principal asset in better shape than at the start of the year.”