Red hot property market makes Brits the richest they have ever been

A booming property market triggered by a tax holiday and Brits demanding larger homes has made the UK the richest it has ever been.

Household wealth in Britain swelled 8.4 per cent over the last year to £11.2 trillion, the highest it has ever been since the Office for National Statistics (ONS) started tracking the figures in 1995.

The UK property market has been on a tear over the last 18 months, supported by a stamp duty holiday, record low mortgage rates and a dash for space.

A 7.3 per cent uplift in house prices lifted household wealth to its highest level ever, the ONS said.

A tax holiday on the first £500,000 of a property transaction has been in effect since July 2020, artificially boosting demand in the housing market by prompting prospective homebuyers to clamour to capitalise on the financial benefits on offer.

Despite the stamp duty relief being watered down to the first £250,000 of a purchase earlier this year, demand has stayed red hot, boosting house prices to record levels.

According to building society Nationwide, house prices rose 10 per cent over the last year in November, despite the relief ending at the end of September.

Ever-increasing pension pots, which, combined with insurance schemes, topped £4 trillion for the first time last year, fed into the record household wealth print.

Soaring wealth underlines how well household balance sheets have held up during the Covid-19 crisis compared to previous recessions.

During the 2008 financial crisis, household wealth shrank 10 per cent, the ONS said.

A combination of government support schemes protecting Brits’ incomes and jobs and a rapid adoption of remote practices by employers allowed a huge proportion of the population to set aside money not spent during lockdowns into savings accounts, increasing their wealth in the process.