Burning property market makes Britons the richest they have ever been

Thursday 02 December 2021 4:30 p.m.

UK household wealth rose 8.4% over the past year to reach £ 11.2 trillion, the highest level on record since the Office for National Statistics (ONS) began to follow the numbers in 1995.

A booming property market triggered by a tax exemption and Britons demanding bigger houses have made the UK the richest it has ever been.

UK household wealth rose 8.4% over the past year to reach £ 11.2 trillion, the highest level on record since the Office for National Statistics (ONS) began to follow the numbers in 1995.

The UK property market has been in a tear for the past 18 months, supported by a stamp duty holiday, record mortgage rates and a race for space.

A 7.3% rise in house prices lifted household wealth to its highest level on record, the ONS said.

A tax exemption on the first £ 500,000 of a property transaction has been in place since July 2020, artificially boosting demand in the housing market by enticing potential buyers to claim to capitalize on the financial benefits on offer.

Although stamp duty relief was reduced to the first £ 250,000 of a purchase earlier this year, demand has remained searing, pushing house prices to record highs.

According to the Nationwide construction company, house prices rose 10% from a year ago in November, despite the relief ending in late September.

Ever-growing pension funds, which, combined with insurance schemes, topped £ 4 trillion for the first time last year, have fueled the record household wealth footprint.

The surge in wealth underscores how household balance sheets have held up during the Covid-19 crisis compared to previous recessions.

During the 2008 financial crisis, household wealth declined by 10%, the ONS said.

A combination of government support programs protecting Britons’ incomes and jobs and a rapid adoption of remote practices by employers have enabled a huge proportion of the population to set aside unspent money during account closings savings, thus increasing their wealth.

Penny D. Jackson