Posted: Wed Apr 11, 2007 9:39 am
Britons have less cash to burn
The average family is £1,400 worse off than last year, according to new figures
Families are £1,400 worse off than last year because of a sharp rise in mortgage debts, latest figures show.
The average UK household has disposable wealth of £38,929 compared with £40,341 in March 2006, according to research by data analysts KDB.
The figures will raise fears that families would struggle to cope with another rise in home-loan costs: the Bank of England kept rates on hold at 5.25 per cent last week, but is widely expected to lift them to 5.5 per cent in May.
To work out disposable wealth, KDB took all Britain’s assets, including property, shares and cash savings, and then subtracted debts including mortgages.
The figures come as Britain’s debt mountain has exceeded the £1.3 trillion mark for the first time.
Homeowners have borrowed heavily against the equity in their homes to fund their spending, with the average mortgage rising faster than house prices. Last year, the typical loan jumped 16% while prices were up just 10%.
The biggest fall in ready cash was in the south east, where it fell by 11% from £68,534 to £45,877.
Households in London have the most disposable wealth at £51,055, while at the other end of the scale families in Scotland have just £24,390.
Matt Boot, chief analyst at KDB, said: “To avoid short-term economic crisis, escalating borrowing levels need to be paralleled by similar growth rates in the liquid assets that consumers can easily convert into cash – namely, disposable wealth.
“The latest six monthly analysis shows that disposable wealth has continued to decline in the UK as a whole. This phenomenon is already economically worrying for the country, and should command the attention of economists, the government and the business community alike."
Source: BBC.co.uk
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The average family is £1,400 worse off than last year, according to new figures
Families are £1,400 worse off than last year because of a sharp rise in mortgage debts, latest figures show.
The average UK household has disposable wealth of £38,929 compared with £40,341 in March 2006, according to research by data analysts KDB.
The figures will raise fears that families would struggle to cope with another rise in home-loan costs: the Bank of England kept rates on hold at 5.25 per cent last week, but is widely expected to lift them to 5.5 per cent in May.
To work out disposable wealth, KDB took all Britain’s assets, including property, shares and cash savings, and then subtracted debts including mortgages.
The figures come as Britain’s debt mountain has exceeded the £1.3 trillion mark for the first time.
Homeowners have borrowed heavily against the equity in their homes to fund their spending, with the average mortgage rising faster than house prices. Last year, the typical loan jumped 16% while prices were up just 10%.
The biggest fall in ready cash was in the south east, where it fell by 11% from £68,534 to £45,877.
Households in London have the most disposable wealth at £51,055, while at the other end of the scale families in Scotland have just £24,390.
Matt Boot, chief analyst at KDB, said: “To avoid short-term economic crisis, escalating borrowing levels need to be paralleled by similar growth rates in the liquid assets that consumers can easily convert into cash – namely, disposable wealth.
“The latest six monthly analysis shows that disposable wealth has continued to decline in the UK as a whole. This phenomenon is already economically worrying for the country, and should command the attention of economists, the government and the business community alike."
Source: BBC.co.uk
Please post any news stories about IVAs here:
http://www.iva.co.uk/forum/default.asp?CAT_ID=5
See my Blog:
http://ivanews.blogs.iva.co.uk