Mortgage advances staying ahead of house price inflation is one of the reasons for household disposable wealth falling for the first time in two years, it has been suggested.
New research from consumer data analyst KDB indicates that disposable wealth in some parts of the UK has fallen by 26 per cent, with the relationship between mortgages and house prices having an effect.
In addition to mortgage factors, KDB cites the fluctuating stock market and lower savings rates as other reasons for the change in wealth.
Despite London reporting a 6.7 per cent rise in disposable income, the UK’s disposable wealth fell from £40,341 six months ago to £ 39,759 today.
Matt Boot, chief analyst at KDB, called the latest figures “economically important” when taking into account higher consumer spending and increased levels of debt.
“We need more evidence across a further half year to see whether the current data marks a temporary setback or a longer-term trend,” he added.
According to Northern Rock, there is an increasing amount number of people re-mortgaging their properties as they try and find the best mortgage rate.
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