Financial crisis hammered Britain’s wealth
Figures published today by the Office for National Statistics (ONS) revealed the extent the global financial crisis had on Britain’s economic wealth.
According to the ONS, wealth (which includes home ownership and savings) dropped to £109,000 per person in 2008 – a five-year low.
However, it recovered slightly in 2009 to £117,000 per person, said the ONS.
The recent recession, which was the deepest since records began in 1955, lasted for six quarters and resulted in the loss of 600,000 jobs and removed over 6% of the economy.
In terms of property, the ONS said prices rose from an average of £43,000 at the start of 1987 to £199,000 in August 2007 – the onset of the credit crunch. They are now hovering around the £165,000 mark.
Vicky Redwood, of Capital Economics, comments: “The increase in wealth is outpacing the growth in the wider economy, mainly due to developments in the housing market.
“Not withstanding the fall in prices in 2009, house prices have soared over that period. We think prices are still overvalued relative to household income so wealth will not stay this high.”