Britain's Financial Position Has Strengthened 'Substantially'

Britons may be in a better position to make repayments on loans and other forms of borrowing as new figures reveal that household wealth has increased dramatically during the last decade.

In a study released by Halifax, the net capital held by British consumers - after deducting any outstanding debt balances - stood at 6,336 billion pounds as of the end of last year. This is a growth of some 127 per cent from the 2,795 billion pounds recorded at the end of 1996. Overall, the total value of household assets increased by 4,343 billion pounds during the ten-year period to 7,627 billion pounds. Meanwhile, typical earnings and retail prices have surged by 52 and 30 per cent respectively.

And although household debt was shown to have risen from 489 billion pounds to 1,292 billion pounds during the period (growth of some 803 billion pounds), consumers could be more able to service demands for payments on secured loans and other forms of borrowing, as asset growth has more than quadrupled debt levels.

Overall, the drive in household wealth was attributed to the increasing value of property over the past decade as equity in residential homes accounted for a total of 2,702 billion pounds last year - a rise of 244 per cent from figures recorded in 1996. The news comes as net financial assets, which are made up of the value of financial holdings minus the value of outstanding consumer credit loans, surged from the 2,009 billion pounds noted in 1996 to 3,634 billion pounds in 2006.

Meanwhile, total savings in schemes such as bank and building society accounts, pensions and company shares are predicted to surpass the 4,000 billion pounds mark by the end of this year - a figure which is more than triple the amount of the nation's household debt. The financial services firm also indicated that deposit-based savings make up about a quarter of British households' total financial wealth.

Commenting on the figures, Martin Ellis, chief economist at Halifax Financial Services, said: "The financial position of households in total has strengthened substantially over the past decade. Whilst much has been said about the rise in debt, it is important to note that the value of households' assets has risen at a faster pace. Housing has played an important part in increasing wealth, but there has also been a significant rise in the value of investments in financial assets in the last ten years."

As a result of rising property prices, homeowners could well discover that they have more equity against which they are able to borrow. In August, Sue Anderson, head of member and external relations from the Council of Mortgage Lenders, reported that a rising number of consumers are looking to remortgage property as a means of debt consolidation, in which they are able to replace expensive unsecured debts with a more competitively-priced secured loan. However, Ms Anderson advised that those considering such a form of secured loans should ensure that they are always in a position to make repayments, something which could well be applied to anyone looking to apply for a loan.

Mark Dawson writes for Loan-Arrangers .co.uk where visitors can compare loans online. Then apply for the best rate secured loans and bad credit loans available. Visit our site http://www.loan-arrangers.co.uk
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