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Comment by pjmorris | Hacker News Reader

> average UK house price reached £226,071

Aren't house prices an aggregate of 'owned outright' via cash, inheritance, debt repayment and 'loaned against' in the form of bank loans against real estate? There's been a dramatic inflation in housing debt, worldwide, that first precipitated the financial crisis a decade ago, and that continues to overhang economies worldwide. It was observed a long time ago that 'the debtor is servant to the lender.' You can't look only at private household wealth, you have to look at bank balance sheets as well. I bet if you include bank balance sheets, you can find a 'small group accumulating so much money.'

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If banks are accumulating wealth, which may very well be our reality, then this wealth would be reflected in the equity value of the bank itself. Thus, this wealth would still be reflected in the wealth of private households who had ownership in the bank. This would apply even if the banks were international, since the owners could still be citizens of the UK.

> If banks are accumulating wealth, which may very well be our reality

It is.

> this wealth would be reflected in the equity value of the bank itself

It is.

> this wealth would still be reflected in the wealth of private households who had ownership in the bank.

It is.

What do you mean with all these "if" statements that are quantitatively true? Even stock markets are aggregators of wealth (focusing gains on a small population).

The point is that it doesn't matter who the accumulator is, only if the accumulation is to a detrimental degree. The Gini coefficient in the UK is already lower than most, and reducing it probably won't solve the homeless crisis there. I suspect the bigger contributor to the homeless problem in the UK is the cost of living increasing to an unsustainable level for a large portion of the population.

My point is that increase in the housing part of the cost of living is directly tied to the wealth created by the extremely relaxed mortgage lending environment of the last 15-20 years. If that debt were extinguished, house (and rent) prices would be lower for a relatively large population, and wealth would be destroyed for a relatively small (but powerful) number.

All true. However, UK bank share ownership doesn't necessarily correlate with UK citizenship. And, maybe more importantly, stock ownership is skewed heavily to a relative few, e.g. (US data) [0].

[0] http://www.nber.org/papers/w24085

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