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Last Updated: Monday, 1 March, 2004, 14:16 GMT
I'm a millionaire. But I'm not rich...
By Duncan Walker
BBC News Online Magazine

For sale signs
The property boom has created new millionaires
Being a millionaire just isn't what it used to be. The social status of the truly wealthy is being eroded by the creation of an army of new property millionaires, a report suggests.

The UK was home to 230,000 millionaires in 2001, but this will rise to 760,000 in 2010 and 1.9 million in 2020, says the Centre for Economics and Business Research.

Many of the new paper millionaires are not tycoons or investment bankers, but ordinary people who have seen wild increases in the value of a home bought for a song years earlier.

"I'm just comfortable middle class," says one accountant-turned-landlord, who now has a 2m property empire. "The international jet-setter image of millionaires is where you have huge amounts of disposable income."

In some parts of the country million-pound property deals are becoming so common that even estate agents say they no longer mean a great deal.

"Million pound properties are 10 a penny in this area and it really does not get you that far," says Christian Walton of Kensington agents Marsh & Parsons. "A million pounds 10 years ago was a lot of money."

Boom years

One of the problems for the new property millionaires is that their incomes do not support the lifestyles the hoi polloi would have expected them to have in the past.

The accountant, who does not want to be named, bought his first home in Hackney for 80,000 in 1987 and saw it crash in value to 35,000 by the early 1990s.

we will no longer be able to class millionaires as rich people, they won't be that unusual anymore
Douglas McWilliams

The boom years that followed saw a two bedroom house and a series of other properties added to the list of investments.

Despite this, he says, home is a "bog standard" terrace house in humdrum Finsbury Park, north London.

But even here there are signs of ordinary people finding themselves unexpectedly wealthy - as long as they had the good fortune to buy years earlier.

"My two neighbours bought their house in 1964 for 3,000 and it's now worth 350,000," the accountant says.

'Trading down'

Getting hold of the money you are now worth means one of two things says Douglas McWilliams, chief executive of the Centre for Economics and Business Research.

He says you can access the money "by trading down in the housing market or releasing equity borrowed against the house".

In the meantime those still faced with paying a mortgage will have less disposable income than many people in other European countries, where property ownership is less of a priority and mortgages and rent lower.

And for those looking forward to being able to say one day that they are worth a small fortune, he warns that by 2010 "we will no longer be able to class millionaires as rich people, they won't be that unusual anymore".

It's predicted that the average home-owner will be worth 161,000 by 2010, and 247,000 by 2020.

Add your comments on this story, using the form below.

I always thought that a true millionaire had that amount of money available as liquid assets. As soon as some of the people in your story try and realise some of their financial gain they are going to get clobbered by capital gains tax.
Tony, UK

In the early 1990's I enjoyed being a Polish zloty millionaire (until the government removed four zeros from the currency). Since then I have visited Turkey on holiday and been a Turkish Lira billionaire. All I can say is that the novelty value wears off very quickly
Malcolm, Warsaw

I wish someone would tell Gordon Brown that being a millionaire property owner doesn't mean you are wealthy. If you move you get whacked for 40,000 stamp duty or if you die your heirs get a massive 300,000 tax bill. Not only that, you're probably paying over 2000 per year in Council Tax along the way. A 1million house ion Scotland may be a sign of wealth, but in the south east it can be a financial burden for ordinary people.
Gus Gordon, UK

Don't you think that remarks like "we will no longer be able to class millionaires as rich people, they won't be that unusual anymore" are offensive to civil servants and the like, trying to survive on less than 15,000 a year?
Amanda, UK

Wait until property prices collapse - then see how many "Millionaires" there are!
Adam Hermitage, England

Ah - this brings back memories of the months leading up to the Thatcher property crash - everybody was running around saying 'my house has gone up twenty thousand in the past three weeks' - 'if next year is the same as this year I'll be halfway to a million' - could this be just a coincidence?
Lon Barfield, UK

I've always said that I'll be a millionaire before I die but now I realise that if I hit the magical barrier in 20 years time, it isn't going to buy very much!
Mark D, UK

A few years back I knew 'paper millionaires' who had invested in internet shares. Back in the 20s there were a lot of 'paper millionaires' investing on the stock market. There is always a supply of small, panicky people prepared to borrow up to the hilt in order to "invest" in the latest big thing and today it's "Buy to Let". As interest rates rise the most over exposed of these will go bust. Unfortunately by the time news about this gets out the panic selling will already be underway. All of which is good for those of us who want to move up the property ladder (any crash is bound to hit the top end of the market harder than the utility end) ... and is fantastic news for first time buyers. Now all we have to do is work out when it will happen.
Mark K, UK

Quote of the day: "Million pound properties are 10 a penny in this area.." !!! I'd love a few of those...
Jon, UK

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