Britain’s “total household wealth” increased by £892bn (about 9%) in 2016, according to some research by Lloyds Private Banking, taking the grand tally to more than £10 trillion for the first time.
All our collective assets are now worth £10.5 trillion (five times UK GDP); that’s quite the chunk up on 2003’s meagre £3 trillion, and on 2006’s £6 trillion. Total household wealth had risen to £8 trillion by 2013 – despite the events of 2007-8 – and hit £9.6 trillion last year.
That means that each UK household has – if everything were equal – gained £143,059 in the last decade.
Property prices, of course, lie at the heart of this escalating “wealth”, accounting for 48% of the increase (£431bn). All the UK’s residential property is now worth £4.4 trillion, says Lloyds, up £1.7 trillion from £2.6 trillion in 2006.
Average house prices are 51% higher than in 2006 whilst the number of privately owned homes grew by 9% to £23.4m in 2016 in the same time period. The contribution of housing wealth in the average household portfolio mix has risen to 42%, from 41% in 2016
Lloyds’ numbers counted a 4.9% increase in house values in 2016, but property was not 2016’s star player, being significantly out-performed by an 8% rise for financial assets (deposits, shares, bonds, life assurance and pensions). These made up around 58% of last year’s annual wealth increase.
Interestingly, Britain’s High Net Worth community seems to have done better than the general population in the last year-or-so; 2017’s Sunday Times Rich List informs us that the country’s 1,000 richest individuals saw their total wealth rise by 14% last year… That’s more than any other asset class.
It’s worth bearing in mind, however, that while these rising numbers sound great, sterling’s value dived against every other world currency after the EU Referendum… It’s still 15% below where it was against the dollar at the start of the year, which, it could be argued, effectively wipes out the 10% increase in total household wealth.
Sarah Deaves, private banking director at Lloyds Bank: “For many people, their overall wealth is locked up in assets that they hold for the longer term like their homes, their pensions, ISAs and investments.
“With rising house and equity prices, net worth has increased substantially in the past decade, growing by £143,000 per household on average. Increasing levels of wealth are clearly positive for households, but with recent changes, like pensions freedoms, it also highlights the increasing importance of proper financial planning, especially as people approach and move into retirement.”