Families take £1,500 pay cut thanks to soaring debt and huge mortgages

Massive mortgages and a lack of savings were given as the main reasons why Britons have less 'disposable wealth'.

The figure is calculated by subtracting your mortgage from the value of your home.

For example, a person with a £200,000 home but a £199,000 mortgage has £1,000 of disposable wealth.

The report, from the data analysts KDB, reveals that the average figure is £38,929 per family. It peaked at more than £40,000 last March.

All the figures would be much higher if the report had only looked at homeowners, rather than including those without property assets.

Without a valuable home, many people do not have a penny in 'disposable wealth' if they have no savings.

The worrying fall comes as Britons' debt mountain has soared to £1.3trillion according to the Bank of England. This is the highest figure since records began, with home loans responsible for more than £1trillion of the total.

KDB's chief analyst Matt Boot said many homeowners had no spare cash because their mortgage repayments were so huge.

The average mortgage is over £150,000, meaning a worker on £23,000 would spend nearly 70 per cent of his take-home pay just meeting repayments.

The problem is heightened by the fact that the size of the average mortgage has been rising faster than house prices.

Last year, it jumped 16 per cent, compared with a 10 per cent rise in property values.

Many buyers are taking out loans worth more than the value of the property, so they can use the extra money to pay the stamp duty bill and refurbish or decorate.

Mr Boot said: "It seems that a major disparity is starting to appear between debt and disposable asset values.

'This phenomenon is already economically worrying for the country, and should command the attention of economists, the Government and the business community."

More evidence is needed to work out whether it is a temporary setback or a longer-term trend, he added.

The report found a huge regional gap between levels of disposable wealth.

In London, the average is £51,055, the highest in the country. The figure has gone up about £10,000 over the last year.

This is because house prices have risen so fast in the capital, and many people can also afford to save more because salaries are so much higher than the rest of the country.

In the North-East, the average is £24,725 - the lowest in the country - and has fallen 15 per cent over the last 12 months.