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Household wealth rises five-fold over the past 50 years

Household wealth in the UK has risen from £1.251 trillion in 1959 (measured in today’s prices) to £6.316 trillion by the end of last year. This represents a five-fold increase in household wealth according to new research by the Halifax.

This gives an average value of wealth per household of £236,998 which is up from £72,719 in 1959. This rise in individual households’ wealth was lower than the increase in total wealth, because of the rapid increase in the number of UK households over this period. In fact, the number of households rose from 16.6 million in 1959 to approximately 26.6 million by the end of 2009.

However, the credit crunch has taken its toll. Household wealth fell by 15% between 2007 and 2008 due to the decline in both house prices and the stock market. The good news is that there was something of a recovery last year when both these markets picked up, to leave collective wealth 8% below the 2007 peak figure.

Household wealth has risen five-fold over the past fifty years.

It is not too surprising that housing wealth as a proportion of total wealth has risen from 22% in 1959 to 38% in 2009. There has been a nine-fold increase in housing wealth over the past 50 years. This has been made up of an almost continual increase in house price value together with a virtual doubling in the number of homes owned to 22.1 million.

Nitesh Patel, economist at Halifax gave the reasons for the increase in household wealth as follows: “In addition to greater overall economic prosperity, government policy measures such as Right to Buy and the privatisation of nationalised industries, coupled with the liberalisation of financial markets, have provided the impetus for increased household wealth in the forms of both housing and financial assets.”

So there you are. We are all now stinking rich as a result of benign government policies over recent years. So I don’t want to hear any moaning when Camerlegg puts up your taxes and reduces government spending. You’ll hardly notice it.

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Posted in Household wealth, Housing

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