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Average Household Wealth Jumps £150,000

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http://www.telegraph.co.uk/finance/personalfinance/7723561/Average-household-wealth-jumps-150000.html

In 1959, typical household wealth – including equity in property, savings, pensions and shares – was the equivalent of £72,700 in today’s money. By last year, the figure had risen to £237,000.

The biggest rise was seen in the 1980s when household wealth more than doubled, but household wealth fell by 15 per cent between 2007 and 2008 and remained 8 per cent below its 2007 high despite an improvement last year.

Nitesh Patel, economist at Halifax, said: “The past half century has seen a dramatic increase in wealth for British householders. In addition to greater overall economic prosperity, Government policy measures such as Right to Buy and the privatization of nationalized industries, coupled with the liberalization of financial markets, have provided the impetus for increased household wealth in the forms of both housing and financial assets.”

She added: “The financial position of households has weakened since 2007 as a result of deteriorating economic activity and reduced house and share prices. Nevertheless, much of this was recouped in 2009 as both house and equity prices recovered somewhat and notably household wealth has still risen over the past decade.”

The increases in house prices and a large rise in the number of privately owned homes have been some of the main factors pushing up households’ wealth.

It comes amid warnings from charities about the growing divide between Britain’s rich and poor.

It looks like the next 10 years will help to reduce UK wealth.

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actually, he meant we are all less well off but with inflation we all feel really rich.

Schroedingers fat cats, the lot of us.

An illusion that never fails to deceive.

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Well, where do they get it from! I have just checked a few figures.

The average house price was £2410 in 1959. There has been 1700% inflation from '59 to 2010.

So if average wealth was £72,700 in today's money, then it would have actually been £4276. Now comparing an average house price to that wealth, it represented just 56% of the wealth.Today the same calculation shows the average house price as 70% of the total average wealth. What a surprise! It is therefore much more expensive to buy a house now than it was in 1959. Well, we are poorer in house terms. Many more people live in flats and converted homes that were originally whole houses. The figures do not take account of that atall. So in fact, it is much more expensive to buy a home than those figures suggest as you cannot really compare like with like, when homes have gotten smaller and the density of living is often far greater.

It is vehicles, central heating, inside bathrooms, foreign holidays and electrical goods which have made us feel better off. Our debts will be much greater though. Now our pensions have been plundered by Brown, the figures may be even more debateable, since the likely pension is much less in actual value per pound.

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We all know house prices were allowed to inflate well over and above there true worth, to allow the banks to keep pumping credit into the system to promote so called imaginary wealth and suspect growth....game over. ;)

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http://www.telegraph...mps-150000.html

It looks like the next 10 years will help to reduce UK wealth.

Patel is a complete bezerka!

1959 was about the time they finally stopped rationing from the 1945 war period!

They were still rebuilding the country, 10's thousands lived in temp accomodation/old army camps and National Car Parks was buying up unwanted bombed sites to turn into . . . .

2010 There are nearly 12 MILLION 'HomeOwers' on Interest Only Mort_gages!

Let alone overborrowed mewers/BTL's/Credit card junkies

Work it out from there!

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You are right Erranta! National Car Parks have done best at wealth creation in the last fifty years, all out of bombsites too! No nasty manaufacturing or exporting or worrying about world economics or even interest rates.

You are right on 'interest only mortgages' too. It has slipped out that a staggering 43% of all mortgages are currently interest only. The Banks are surely mad to have allowed this. In my humble view all devices designed to help are in fact no help atall. All they achieve are....wait for it.... higher house prices that people cannot afford.

The only thing that will help is proper rules about mortgages that no lender may transgress from. When I were a lad.....no don't fall asleep! Erhmmmm....the lender could only lend 2.5 x the first income and 1 x the second and max 95% LTV on a proper repayment basis. If we asked homeowners to apply this principle to themselves and imagine they were about to buy their own house, it would be interesting to see how many of them could actually buy their own home on their current income.

Lots of folk could not afford it, even after allowing for a 35% deposit coming from proceeds of former home.

It was a lower standard of living in 1959, but it was actually easier to buy a house for many people.

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Many more people live in flats and converted homes that were originally whole houses. The figures do not take account of that atall. So in fact, it is much more expensive to buy a home than those figures suggest as you cannot really compare like with like, when homes have gotten smaller and the density of living is often far greater.

It is vehicles, central heating, inside bathrooms, foreign holidays and electrical goods which have made us feel better off. Our debts will be much greater though. Now our pensions have been plundered by Brown, the figures may be even more debateable, since the likely pension is much less in actual value per pound.

You're being inconsistent here. If you (rightly) recognise that like-for-like comparisons are skewed because houses have become smaller, you must also recognise that this is (to some extent) compensated for by the presence of, say, central heating, loft conversions and inside bathrooms. While the reduced size has tended to decrease the quality of the property, said improvements have at the same time tended to increase the quality.

Edited by Selling up

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It is therefore much more expensive to buy a house now than it was in 1959. Well, we are poorer in house terms. Many more people live in flats and converted homes that were originally whole houses. The figures do not take account of that atall.

I think the biggest problem with these figures is that they aggregate groups of people who are in completely different situations. If you add up 50something couples living two people to a paid-off £500k 4 bed detached with 20/30somethings who are renting a house between 5 unrelated working adults then on average the housing wealth per person all looks hunky dory.

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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