Britain's homes gained £57bn in value over 2012, bringing their total market worth back to levels seen in 2009, property website Zoopla has found.
The value of homes across the country has now reached £5.96 trillion, according to Zoopla.co.uk, which worked out the figure by combining the estimated current market worth of every home in Britain.
But three-quarters of the total increase seen over the last year came from the strength of the London market, with the value of homes in the English capital increasing by an estimated £42.4bn.
Property values fared much better in England than in Scotland and Wales in 2012. The overall value of homes in England grew by £64.8bn or 1.2pc over the year but fell by £1.2bn or 0.3pc in Scotland and by £6.6bn or 3.1pc in Wales.
Two-thirds of Britain's 250 biggest towns and cities saw property values increase over last year, with Bristol and Edinburgh also among the biggest gainers of 2012, recording increases of £2.3bn and £922m respectively, Zoopla said.
The biggest year-on-year falls were recorded in Sheffield (down by £286m), Doncaster (down by £160m) and Stoke-on-Trent (down by £149m).
The increase in property values across Britain takes the total market value of homes back to the same level seen at the end of 2009. Homes gained £67bn in value over 2010 but saw a £124bn fall in 2011.
Despite the relatively flat performance of the market in recent years, the total value of all homes in Britain combined has risen by £1.9 trillion (46pc) over the past decade, Zoopla said.
However, homes across Britain are still worth around 10pc less than they were at the peak of the market in 2007, when their total value was an estimated £6.62 trillion.
Although property values fell across Wales and Scotland last year, they have increased at a sharper rate than those in England over the last decade.
England has seen an increase of 43pc (£1.6 trillion) over the last 10 years, while Scotland has seen 84pc growth (£183bn) and Wales recorded a 57pc increase, amounting to £74bn.
Zoopla spokesman Lawrence Hall said: "Even with the worst economic downturn in living memory over the past few years, the value of Britain's housing stock has grown a staggering amount over the last 10 years.
"It's hard to see if we will experience the same levels of year-on-year growth witnessed in the early noughties, but with overall values beginning to creep back up, homeowners should be feeling a little more confident."
The London market has performed relatively well amid strong interest from overseas buyers looking for a safe haven amid the uncertainty of the eurozone.
Some analysts believe that the market for top-end homes in London could cool slightly this year following the introduction of a 7pc stamp duty rate for homes worth more than £2m last spring.
There have been mixed predictions for house prices across the country this year, with some studies predicting small increases amid recent improvements in mortgage deals for borrowers.
Others have forecast there will be small declines or that prices will be flat, with first-time buyers still struggling to get on the property ladder and squeezed household budgets making people reluctant to borrow.
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