THE GUARDIAN

Sam Jones
Monday March 1, 2004
The Guardian

The collective dream of aspirational Britons is on the verge of fulfilment: you too could become a millionaire. The good news is that the number of people whose assets are crossing the million mark is likely to triple this decade as homeowners reap the benefits of investing in bricks and mortar.

The bad news is that a seven-figure bank balance will no longer command the respect that it once did because such riches will be relatively common by 2010.

According to the Centre for Economics and Business Research (CEBR), there will be 760,000 UK millionaires in 2010, compared with 230,000 in 2001.

The massive increase in the number of rich individuals is mainly due to the predicted rise in housing wealth - the difference between the value of a home and the amount borrowed. The CEBR's annual Housing Futures report, which is published next week, says that as much as 90% of the increase in millionaires will be due to rising housing wealth.

"Millionaires will be 10-a-penny by 2010," said Douglas McWilliams, the CEBR's chief executive. "I think we will no longer be able to class millionaires as rich people - they won't be that unusual anymore."

The report predicts that by 2020, there will be 1.9m millionaires in Britain.

But if millionaire status is being devalued year after year, it still has its compensations. Mr McWilliams said the growing number of seriously wealthy Britons would enable many older people to lavish more money on themselves and their children and grandchildren. He predicted a rise in spending on luxury retirement homes, exotic holidays and property abroad.

But how will Britain's newly minted millionaires celebrate their good fortunes?

According to the National Lottery, virgin millionaires tend to splash out on cars - BMWs, Fords and Land Rovers are the most popular makes - and holidays, especially trips to Spain, the USA and Italy.

More adventurous millionaires might like to take their lead from those winners who have spent their money on everything from castles to football clubs and even pieces of the moon.

However, if people are more inclined to plough their money back into property, they might find things have changed since they got their first mortgage. Average house prices in the Midlands are now above the £100,000 mark and twice that sum in London.

The Housing Futures report, which gives a detailed assessment of the prospects for the housing market in each UK region today and over the next 20 years, analysed housing wealth over the last three decades.

It found that the average homeowner retiring in 1980 had around £30,000 of housing wealth, while those retiring in 1990 had about £62,000. By 2000, the figure had risen to £76,000. It is expected to hit £161,000 by 2010 and almost £247,000 by 2020.

The report also predicts that house price inflation will rise a little faster than average earnings over the next five or six years. It attributed the rise to "lowish" interest rates and a shortage of homes.

However, it expects that by 2015, "the markets [will] be largely in balance and from then onwards house price inflation should be in line with household disposable income".

It seems that a few years of inflation are not the only headache caused by the boom. If we are all soon wallowing in champagne and buying supersonic planes, then "millionaire" will inevitably lose some of its gold-plated verbal shine.

"We'll have to start looking around for a new word," said Mr McWilliams. "Perhaps billionaire will replace millionaire."

But even aspiring billionaires should not be disheartened. Only last week, JK Rowling, whose progress from struggling single mother to bestselling author is well documented, won a place on the Forbes Rich List. Her personal fortune is estimated at $1bn (£535m).

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