Value of UK plc breaks through £6 trillion

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The total value of the UK broke through the £6,000bn mark for the first time last year thanks to another rise in housing wealth, official figures showed yesterday.

The Office for National Statistics report, which adds up the value of buildings, roads and financial assets among other things, showed an increase of £119bn on the previous year.

However the 2 per cent rise was a sharp slowdown from the 8 per cent increase in 2004, reflecting the sharp economic slowdown in 2005. The economy grew at its slowest rate for more than a decade, official figures showed.

Housing continued to be the most valuable asset, with a total value of £3.58 trillion - up 4 per cent on the previous year and representing 59 per cent of the country's total wealth.

This contrasted with a fall in the value of commercial industrial buildings, a minuscule rise in plant and machinery and a 2.4 per cent rise in civil engineering work.

The figures will do little to encourage hopes that the long-awaited rebalancing between the consumer and industrial economies is under way.

House prices have risen in almost every month - sometimes by as much as 2 per cent - since the Bank of England cut borrowing costs in August last year. Meanwhile the production side of the economy has posted falls in five out of the past six quarters.

The figures are a graphic example of how the property price boom of the past decade has changed the make-up of wealth.

In 1995 housing made up just 43 per cent of total assets and it broke through the 50 per cent barrier only in 2000, the same year that homes were worth £2 trillion for the first time.

Between 1948 and 2003, the total value of non-financial assets in the UK increased from £551bn to £2.55 trillion, the ONS said.

Over the past five years, the value of plant and machinery in use increased by 6 per cent. The total cost of replacing all of the country's capital assets in their current conditions would be £2.67 trillion.

The report - Capital Stocks, Capital Consumption and Non Financial Balance Sheets - is published annually by the ONS.