The credit crunch has hit UK household balance sheets hard. Between June 2007 and September 2008, net financial assets of households have fallen about 15 percent. Of course, dates are important here. This chart doesn't include the last six months, when households balance sheets took a further hit due to declining equity prices.
Furthermore, the chart above does not include non-financial assets such as houses. Property prices are down around 20 percent since autumn 2007. It does, however, include, household loans secured on property.
The recent decline in net financial assets remains quite modest compared to the dot.com crash. Between December 1999 and March 2003, households saw their financial net worth fall by 30 percent. During this same period, house prices were buoyant, and thus limited the overall extent of declining household wealth.
No such luck this time; all asset classes are now tanking; giving no relief as household wealth takes a battering.