A research conducted by Lloyds Bank Private Banking shows that the total household wealth in the UK reached an estimated £10.5 trillion in 2016. Incidentally, housing assets along with financial assets have contributed significantly to the growth in the UK household wealth.
The total household wealth grew by £892 billion (9 per cent increase) in 2016 to reach £10.5 trillion. In 2015, the total household wealth was estimated at £10.5 trillion. This proves that housing as an asset class is gaining greater value for investors in the UK. Many investors see the ROI potential from housing and are acquiring assets in prime locations where growth in values is higher.
Despite the economy facing a few challenges, both housing and financial assets grew strongly in 2016. Average house prices rose by 4.9 per cent in 2016 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 £431 billion to the overall increase in wealth - accounting for 48 per cent of the total rise, the Bank said in its report.
Having fallen in importance relative to financial wealth over much of the past decade, the contribution of housing wealth in the household portfolio mix has edged up in the past year from 41 per cent to 42 per cent in 2016. The proportion accounted for by financial assets is 58 per cent, the report observed.
The report by Lloyds Bank upholds the investors’ faith in the UK property market, which has been consistently delivering a good ROI in the long-term.
Total household wealth grows by £892 billion in 2016 – driven by growth in the value of both financial and housing assets