Consumers put home ownership first

The number of housing transactions rose by 18% between 1992 and 2002, research from Mintel reveals.

Although this conceals an 8% decrease to 1.4 million transactions in the past year, the Mintel 2003 British Lifestyles Survey shows that 81% of consumers who work full-time claim that owning their home is a priority.

The survey of 2,000 UK consumers shows the amount of credit available for all purposes has now reached over £92bn, bringing effective consumer incomes to approaching £1trillion.

Consumer expenditure has risen by 2.3% in real terms as consumers continue to borrow on credit cards, or by remortgaging their home due to positive equity.

Mintel finds that remortgaging to release credit is causing repayment problems for some families, but says that non-mortgage borrowing has also risen as a share of income since 1998.

The estimated average household income is almost £36,000. The average amount owed by the British has more than doubled in the past 10 years, with the average for each household amounting to over £33,500. The British now owe well over £800bn.

Saving ratios have increased in the last year from 6.1% in 2001 to 8.2% in 2002. In 2002, consumer expenditure did not rise as fast as incomes, resulting in a rise in the savings ratio. This trend is expected to continue in 2003.

Over the past decade, overall consumer expenditure rose 72.5% at current prices to reach some £674bn. There are now signs that consumer expenditure is slowing. Mintel says consumers are becoming slightly more cautious in the face of global, political and economic uncertainty.

The survey shows that the number of people in their 60s will surpass the number of under-fives for the first time in recorded history over the next five years. Less generous pensions in years to come could also fuel the market for equity release.

Overall, the Mintel survey paints a picture of a surprisingly balanced British consumer, with around 50% of adults enjoying a good balance between work and life.

Over the past five years stress levels have not risen – this is particularly true of British men. Family is the number one lifestyle priority, with the majority of British sitting down at home to a meal together. The number of consumers not taking a holiday continues to fall.

Nevertheless, there remains a core element in the population who feel that their family and social life suffers as a result of work. Lack of time means these consumers avoid consulting a doctor, preferring a trip to the chemist or pharmacist.