Saturday, Sep 29, 2007
Hollowed out Britain, strip out equity and what's left?
Firstrung: Rising UK house prices accounts for bulk of individual wealth
Data published by Halifax financial services shows that household wealth has more than doubled during the past 10 years on the back of soaring house prices...Britons collectively had assets worth £6.336 trillion at the end of last year, after outstanding debt was taken into account, up from £2.795 trillion at the end of 1996, according to Halifax Financial Services. The group said the total value of people's assets rose by £4.343 billion during the past decade, massively outstripping the £802 billion rise in debt during the same period. A large part of the gain in household wealth was driven by booming house prices, with rises in the value of property accounting for more than half of the gain.
Posted by converted lurker @ 08:54 PM (747 views) Add Comment
7 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. japanese uncle said...
M. King will be remembered only by his apt remark, saying “House prices are a matter of opinion whereas debt is real.” Thank you very much for the matter of opinion in the amount of 6.336 trillion, but the 1.3 trillion debt will not disappear as easily as the housing assets disappears.
2. New_order said...
1.3 trillion in debt. 1 and 3 make 13; the unlucky number!
Hurry up webmaster and give me my admin password so that other people can actually start to see my comments! Thanks.
3. enuii said...
OK so I'm sitting in a pile of Bricks'n'Mortar that is apparently worth a couple of hundred K but it's irrelevant as I need somewhere to live and somewhere else will more or less cost the same. Unless I leave the country and don't come back I will never realise any of it and if I die its irrelevant to me.
I'm therefore not really wealthy at all, it's just an illusion.
4. Bjedean said...
So this is what the balance sheet for UK Households looks like
Balance sheet at 2006 1996
Assets £bn £bn
house 3769 1193
investments 2886 1599
cash 960 480
Total 7615 3272
Liabilities £bn £bn
secured debt 1067 406
unsecured debt 212 71
Total 1279 477
Net wealth 6336 2795
In a depression, house and investments could be worth 1/3 of what they are now (house still more than 1996), which would leave us with net wealth of only £1.899 trn, or 1/3 less than in 1996, or even less if adjusted for inflation.
5. planning4acrash said...
You can always short and sell to rent, or take this opportunity to have a sabatical and travel the world. There's always a choice.
6. voiceofreason said...
Can somebody let t Gumbrell know that comments are allowed again on David Smith's blog :-)
Also, the Sunday Times seems to have two Economics Editors now (is this new ?).
One story today is written by Gary Duncan, Economics Editor, others by David Smith, Economics Editor... ?
7. happyrenter said...
A friend uses the phrase 'superficial affluence' which fits quite well.