In 1987, when Margaret Thatcher won her third term and Rick Astley was at No1 in the singles charts with Never Gonna Give You Up, the UK was worth a mere £1.7 trillion. Now, for the first time, following an astonishing period of growth, the figure has broken the £6 trillion mark.
The Office for National Statistics said yesterday that the total value of the country at the end of 2005 was £6.01 trillion, up £119bn from the previous year and almost five times the output of the UK economy. The ONS measures wealth by adding up the value of buildings, roads and financial assets, among other things.
The wealth of the UK has risen steadily since Labour came to power in 1997, compared with the late 1980s and early 1990s, where it fluctuated around the £2.6 trillion level.
Much of this was influenced by the volatile housing sector, which tends to hold much of the country's wealth. A record number of repossessions in the early 1990s, when more than 1 million people lost their homes, helped reduce the wealth held in housing, which hit a low of 42% of the total in 1994.
In 2005, housing represented 59.5% of the UK's total wealth, up 1.3% on the year and significantly above the peak of 53% hit in 1987.
Though house prices have soared from an average of £43,164 in 1987 to £165,035 in the second quarter of 2006, the increase in prices over last year were moderate, growing by only 4.3%, the smallest rise since 1995, when they fell by 0.5%.
The slowdown in house price rises dampened the growth of the UK's wealth, which rose by 2% last year over 2004, the smallest rise in more than a decade. The country's value increased by 8.4% both in 2003 and 2004 and 13.8% in 2002, during which house prices surged by more than 25%.
Nevertheless, housing continued to hold most of the country's wealth, totalling £3.58 trillion, a rise of 4% from 2004. Households and non-profit organisations owned £3.36 trillion of this value.
"The rise in residential property worth shows that people's holdings of tangible assets have been rising as well as household debt levels," said Howard Archer, an economist at Global Insight. "This should help to offset the risk to the economy from rising debt levels, assuming that property prices do not crash any time soon."
Meanwhile, depreciation of stock totalled £131bn, with plant and machinery making up nearly a third of this. However, with the value of plant and machinery in use increasing by 6% in the past five years, the figures indicated that investment in capital stock was greater than depreciation.