The total value of homes in Britain reached a record £4 trillion last year.

The combined price tag of the 22 million homes in the country has more than trebled in the past decade, rising by 208 per cent to £4,014 billion since 1998, new figures from Halifax, the biggest mortgage lender, show. In the same period the retail price index, which is one measure of inflation, rose by 31 per cent.

The sale value of all homes is nearly three times as great as the £1.4 trillion gross domestic product (GDP) of Britain, and more than half of the US GDP, which is £7.4 trillion. It would fund the building of 10,000 nuclear power stations or a fleet of 28,500 of the most expensive yachts at a cost of £140 million each.

This is good news for homeowners: despite the sharp increase in household borrowing in recent years, housing equity far outweighs mortgage debt. Even with total mortgage debts worth £1.2 trillion, the enormous value of the housing stock means that Britons are sitting on a mountain of net housing wealth worth £2.8 trillion.

Martin Ellis, the chief economist at Halifax, said: “Mortgage debt accounts for only 30 per cent of the value of the UK’s £4 trillion worth of housing assets.”

The scale of the huge gains in housing wealth highlights how even significant falls in house prices in the coming year, while unpleasant, would not be as catastrophic as is sometimes suggested. Even the gloomiest economists do not expect prices to fall by 15 per cent, with most experiencing much smaller declines. Such falls would still leave homeowners sitting on most of the huge gains racked up in recent years.

Citigroup predicts that house prices will fall by 10 per cent in the next three years. Nationwide forecasts that most prices will stay static this year, but predicts small decreases in Northern Ireland and the North West of England. Halifax says that prices will stay steady, except for falls in the North of England and the Midlands.

If house prices move in line with the predictions of Halifax it could be enough to the widen the gap between prices in the North and South, which has narrowed in the past five years. In 2002 housing stock in the North of England was worth 39 per cent of the total value, while the South’s share was worth 61 per cent. Last year the ratio was only 45 per cent to 55 per cent.

In the South property wealth is concentrated mainly in London and the South East. The total value of homes in the two regions is £1.44 trillion, 36 per cent of the total value of residential properties.

Mr Ellis said: “There is a combination of high house prices and a large number of properties. There are six million private dwellings in London and the South East, representing 27 per cent of the UK total.”

Scotland enjoyed the largest increase in the value of housing last year. The value of all homes in the country rose by 16 per cent to £247 billion. Northern Ireland was close behind with a 15 per cent increase in the value of properties, now worth £123 billion.

The amount that people in Britain owe in mortgages shows that most people are keen to secure a stake in real estate. Homeowners have been helped in the accumulation of this debt by the most highly developed home loan finance industry in Europe.

It is still possible for most borrowers to organise a loan at any time and anywhere. Yorkshire Building Society now offers an online mortgage with no paperwork.

The preoccupation with property is a cause for concern, but Britons are not alone in their love of a home of their own. The level of owner-occupation is as high as 97 per cent in Romania. Spain and Greece are also high in the league, with 85 per cent and 83 per cent respectively. In Britain, by contrast, the level is about 70 per cent, although the cost of getting on to the housing ladder could be preventing people from becoming a homeowner.

The huge scale of household debt, mainly mortgages, accumulated by the country could add to economic difficulties this year if it makes overstretched consumers reluctant to carry on borrowing and spending, hitting the consumer demand that has powered the economy since 1996.

But the size of the wealth piled up in bricks and mortar that can be set against this debt offers some comfort that at least the personal liabilities of the nation are much more than offset by very substantial assets.

Explore Property

• Buying & Selling

• New Homes

• Overseas

• Interiors

• Investment

• Gardens

• Cool In Your Code

• Specials

• First-time buyer

Times recommends

• Second homes: credit crunch casualty or money-spinner?
• How I built my own sliding house
• Top 10 incentives for house buyers