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| Blackleaf |
Scotland's wealth growth beats rest of UKDISPOSABLE wealth is increasing at a faster rate in Scotland than in any other part of the UK, although Scotland remains the poorest region of the UK (even behind Wales and NI), with an average household disposable wealth of £29,724, compared to London's £81,732Scotland's wealth growth beats UK COLIN DONALD BUSINESS CORRESPONDENT DISPOSABLE wealth is increasing at a faster rate in Scotland than in any other part of the UK, according to a new survey by KDB, the Bristol-based researchers to the wealth management industry. The research suggests that, in the six months to March 2006, disposable income in Scotland grew by 35 per cent, year-on-year, compared with 12 per cent in the previous half year. The fast pace of growth compares with a national average increase of 7 per cent, down from 9 per cent in the earlier period, and a rate for London that dropped from 7 per cent to 2 per cent during the same period. The figures also show that the average household disposable wealth in Britain has now topped £40,000 for the first time, though Scotland still lags far behind that figure. Disposable wealth is defined as a combination of realisable house assets (excluding mortgage and mandatory equity retention), stocks and shares, and cash savings. While the survey shows that Scotland remains the poorest part of the UK, with an average household disposable wealth of £29,724, compared to London's £81,732, it confirms that the notorious north-south divide appears to be narrowing. The gap between the two average wealth figures is now around £52,000, down from £56,000 in the previous period. After Scotland, the fastest increases in disposable wealth are in the English north-west (32 per cent), Wales (31 per cent) and the north-east of England (27 per cent). Asked how much of the increase can be ascribed to the relative vitality of the Scottish property market, compared to those of London and the south-east, Matt Boot, chief analyst at KDB said: "It's true that a large part of the shift in growth northwards has been due to property pricing. It's also true that these things tend to have a ceiling although we can't say when the centre of growth will probably shift from Scotland to other parts of the UK, perhaps to the north-east or the Midlands. "In the meantime, I think this is good news for Scotland because the growth in disposable wealth helps bring in investment and it could stop the migration of people into other areas. Commenting on the survey, Robert E. Wright, professor of economics at Strathclyde University told The Scotsman: "Research like this is to be welcomed because it shows us how people live and allows us to see the Scottish picture more accurately and honestly. Earnings and household income data tends to mask the interesting differences in consumption. "The faster growth is not that surprising as historically Scotland has been playing catch-up. Scotland still has lower housing equity, lower levels of wealth and savings and while this growth is to be welcomed, the truth is that it would have to be sustained over a lengthy period if we are going to erode the disparity." scotsman.com |
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| Neil |
While interesting & useful it doesn't mean that much as is shown by the various 30% odd increases. No real growth rate can last for long at that level.
My guess would be that this is very largely house prices. If you have a £150,000 & a £130,000 mortgage you have wealth of £20,000. If house prices go up 10% to £165,000 & you pay off £4,000 of the mortgage your wealth next year is ££39,000, an increase of 95% but in real life you aren't that much better off. On the other hand a few years ago I did see some figures for London & Edinburgh & calculating the difference in normal London mortgage payments & average Edinburgh ones & throwing in a couple of grand for increased travel to work expenses, the Londoners, after tax, weren't much better off. |
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| azzuri |
..of course if house prices go into freefall then you don't really have any 'wealth' at all. A profit is only a profit when it's realised.
The UK economy is being kept going at the moment by huge amounts of personal debt - and it's all going to come to an abrupt halt next year. |
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| SLG |
Should I be selling my flat quickly before the crash??? |
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| azzuri |
I don't think it'll be a 'crash' as such, as it won't be overnight - it'll probably take 3 or 4 years to hit the bottom - starting this September/October. I'm getting rid of my property and I'm probably going to make a 5-10% loss but rather that than 40-50% in 3 or 4 years - it also gives me the ideal opportunity to go travelling for 6 months without any ties. So in short, if it were me I would consider selling your property asap. Of course, don't take finance advice from someone over an Internet Forum - best to do the research yourself. The best investment you could make with any profits from your house sale would be gold/silver - not the certificate types but physical in the form of coins/bars. Gold is at it's lowest ebb for decades and it's where all the money will go next year with the expected run on the dollar. I expect Gold/Silver prices to double or even triple over the next 5 years. All in all - if you do decide to sell, just sell. Don't make a big fuss over a few thousand or what you think it's 'worth'. I know it's a cliche but it's only worth what someone will pay for it. Luckily places where property is still relatively affordable (Kilmarnock) won't be hit that badly. Places like Edinburgh are going to nosedive though, and take a lot of people's long-term financial future with it. |
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| Aventinian |
Don't know where you got that from, but post-9/11 it's not true. I have gold in my possession, so I usually keep a vague check on the price and I'm rubbing my hands together right now. http://www.gold.org/value/stats/statistics/monthlysince1971.html If they double or triple, I certainly won't be complaining though... |
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| azzuri |
In the early eighties, I was given a few sovereigns as a present by my grandparents (it was all the rage at the time).
At the time, a half sovereign cost them in the region of £40-50. You can get one for almost the same price today, so although it is technically the same price, the REAL value has plummetted. I just hope you're holding real physical gold and not futures or certificates - if the s**t hits the fan then they'll be worth nothing. There is 5 times as many gold futures or certificates than physical gold that exists. And remember, a profit is only a profit once it's realised. 
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| Neil |
i don't believe we are in for a long term house price fall in present circumstances. Short term panic rises & falls are likely.
The reason is the laws of supply & demand. So long as we are building less than 1% of our housing capacity a year (the normal assumption being that houses last 100 years) there is going to be a shortage. Normally when there is a shortage prices go up & therefore more gets supplied & a balance is reached. Housing is such an overregulated & outdated industry that new building is prevented. this is why we gget people enormous prices for 2nd homes & young people unable to afford anywhere in the Highlands having to move out - at thhose prices it would be easy to build more if the government didn't want to protect fields of rape. Whenever rising prices can't translate into increased supply Old masters & historic artifacts are the obvious ones) they become "investments", prices go up but also become unstable because everybody knows that if they went down they would cease to be investments. A century ago house & cars cost about the same & cars have improved a lot since then. We could have cheap good housing for everybody if the govenment would stop bloody preventing it. On the other hand an enormous number of people would face losing their "investment" - obviously there would be no loss in real tangible value but a large paper loss |
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