Soaring home values provided a major boost to Britons holding property assets in 2016 as they helped push the nation’s wealth through the £10tn mark, according to a new survey.
Lloyds Bank’s private banking arm said total household wealth in the UK increased by £892bn, or 9%, last year, with the property and financial markets each responsible for half the rise.
The study found that the average price if a home in the UK rose by 4.9% during the year and an additional 183,000 homes were added to the stock of private properties – both owner-occupied and those in the private rental sector. This resulted in housing wealth contributing an estimated £431bn to the overall increase in wealth – accounting for 48% of the total rise.
The total value of financial assets, such as bank and building society deposits, government bonds, shares in companies, life assurance and pensions, held by households increased by a similar amount – £461bn or 8% – in 2016.
The past decade has seen wealth held by households surge from £6.6trn in 2006 to an estimated £10.5trn last year.
The increase of £3.9trn in household wealth is equivalent to £143,059 per household since 2006 which means the average value of household wealth has grown by 59%, far exceeding the 33% rise in the Retail Price Index and 37% jump in gross household disposable income in the past decade.
Sarah Deaves, private banking director at Lloyds Bank, said: “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.”
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