UK Households wealthier than ever before

HAMISH_MCTAVISH

total household wealth in the UK has passed the £7 trillion mark for the first time, despite the tough economy.

Net wealth, which includes the value of residential buildings and other assets, minus outstanding debts, was estimated at £7.05 trillion for the end of 2012, by Lloyds TSB Private Banking.

That represented a £2.71 trillion increase over the past decade, or around £86,000 per household, most of that taking place during the "boom" years.

Within that, housing wealth - the value of housing less outstanding mortgages - increased by £1 trillion over the past decade as property values rose faster than mortgage debt ballooned.

The figures were not adjusted for inflation, but Lloyds said household wealth had grown at a faster rate (62pc over the period) than incomes (44pc) or headline price rises (29pc).

http://www.telegraph.co.uk/finance/personalfinance/houseprices/9979554/Housing-market-at-three-year-high-says-RICS-survey.html

:beer:

Mallotum_X

Presumably it this is heralded as good news the distribution of the wealth is more equal than ever before...

(either way at least its not another MrsT thread!)

grizzly1911

HAMISH_MCTAVISH wrote: »

http://www.telegraph.co.uk/finance/personalfinance/houseprices/9979554/Housing-market-at-three-year-high-says-RICS-survey.html

:beer:

If in real terms then accounted for by rampant increases in housing by reckless lending policies.

As a country there is no point having assets if you don't have the income to service them.

Carl31

Asset wealthy, but cash poor

coastline

an eye opening view of essential goods and services we need and how they've gone up in recent years..
anyone who thinks most people are better off...well have a look.

http://tullettprebonresearch.files.wordpress.com/2013/02/tpsn043_essentials_index.pdf

Indicators of inflation, set out in figs. 3 and 4, help identify where some of the problems lie. Between
2002 and 2012, cumulative inflation of 29%, as measured by CPI, was far exceeded by increases in
the prices of essentials such as gas and electricity (+142%), (+108%), fuel (+71%) and food (+43%).
As well as exceeding CPI inflation, the prices of these essentials also rose by more than nominal
average wages (+36%).
This trend has been even more pronounced since 2007. Between 2007 and 2012, cumulative growth
in nominal wages (of 10%) has been exceeded not only by CPI inflation (+17%) but by far bigger
increases in the prices of essentials such as gas and electricity (+46%), vehicle tax and insurance

(+88%), fuel (+56%) and food (+30%).

wotsthat

Most of the inflationary items listed have high % increases but nominally and as a proportion to outgoings they aren't that big.

My biggest outgoing by some way isn't essentials but tax. I haven't worked it out exactly but it looks to be ahead of inflation every year for a decade.

IveSeenTheLight

wotsthat wrote: »

Most of the inflationary items listed have high % increases but nominally and as a proportion to outgoings they aren't that big.

My biggest outgoing by some way isn't essentials but tax. I haven't worked it out exactly but it looks to be ahead of inflation every year for a decade.

Yet as a country, we see the deficit has grown in the same period.

Graham_Devon

Thing is H, you could double or treble that number....and what difference would it make to the households up and down the country?

Not much. A lot of it can't be accessed. It's just paper wealth. A lot of it with outstanding debt attached.

the_flying_pig

HAMISH_MCTAVISH wrote: »

...total household wealth in the UK has passed the £7 trillion mark for the first time, despite the tough economy.

Net wealth, which includes the value of residential buildings and other assets, minus outstanding debts, was estimated at £7.05 trillion for the end of 2012, by Lloyds TSB Private Banking.

That represented a £2.71 trillion increase over the past decade, or around £86,000 per household, most of that taking place during the "boom" years.

Within that, housing wealth - the value of housing less outstanding mortgages - increased by £1 trillion over the past decade as property values rose faster than mortgage debt ballooned.

The figures were not adjusted for inflation, but Lloyds said household wealth had grown at a faster rate (62pc over the period) than incomes (44pc) or headline price rises (29pc)...

i find it a little odd that total wealth is now higher than at peak 2007 [forget the irrelevant decade-on-decade figures that are unhelpfully chucked in there] given that house prices were higher then & share prices about the same.

is the issue that total net wealth gas gone up because, despite house prices going down, maybe something like:

(1) [modest] housebuilding post 2007 means that we have more houses now than then [e.g. 11m houses worth £100k each are worse the same as 10m houses worth £110k each];
(2) low lending combined with the predominance of repayment rather than IO mortgages has reduced total mortgage debt;
(3) etc.

I wonder how much higher we are than in 2007?

it's a cast iron certainty that we're a good deal less wealthy when controlling for inflation, given that this has been so high [the press statement acknowledges that inflation is not taken into account] since 2007.

a smaller consideration is that population is up by a couple of million [3% or so] since then.. so real net wealth per capita will be down by a little bit more

michaels

Graham_Devon wrote: »

Thing is H, you could double or treble that number....and what difference would it make to the households up and down the country?

Not much. A lot of it can't be accessed. It's just paper wealth. A lot of it with outstanding debt attached.

I think the clue may be in the word 'Net' in the OP?

Graham_Devon

michaels wrote: »

I think the clue may be in the word 'Net' in the OP?

I meant in overall terms if doubling our wealth.

It wasn't specifically about the 7.05tn, as most of that will be helf by the few.

The "households" I was referencing in response are a different ballgame.

Take out those owning most of the wealth and least of the debts and what are you left with?

The headline figure may have gone up....but what's beneath it? Unless the headline figure is all we are supposed to look at....but that wouldn't make for much debate on a debate board. Your typical household may have seen their net wealth increase....

...But how can they access that without paying off outstanding debts to release the wealth? They can't, hence my point.

Only if the asset is debt free can ou access the wealth.