Thursday, Jun 11, 2009
NegEq affects the pattern of demand and supply in our economy
Telegraph: Bank of England says 1.1m Homeowners in Negative Equity
The number of homeowners whose mortgage is more expensive than the value of their property has reached the peaks of the 1990s recession in just 18 months. In the last recession, "it took almost six years" to 1995 for the number of those in negative equity to hit 1.1m, the Bank said in its quarterly bulletin, to be published on Friday.
Posted by alan @ 09:15 PM (1133 views) Add Comment
14 Comments
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1. paul said...
'Negative Equity' sounds so nineties.
Can't we call it something more fashionable, something more up to date like 'Unappreciating asset' or 'Nequity' or a snazzy-sounding euphemism like 'hitching a ride on the property snake'?
Would sound so much better in the media.
2. paul said...
"Containing the negative equity problem is vital to the country's economic health, the Bank stressed."
Err. No, its probably vital to central bankers' pension pot economic health though ...
3. peeping tom said...
How about 'equitably challenged' to be politically correct.
4. devo said...
The Yanks use the term 'underwater', as in the example, "Fannie to Aid Underwater Loans".
5. mark wadsworth said...
Frankly, this is drivel of the highest ordure - we hit a million several months ago, it's more like two million by now (and counting).
6. crash bandicoot said...
How about "bubbled over" instead of "negative equity"? Another thought - have some property investors become property outvestors now?
7. paul said...
I've just been looking at Alice's blog and I am STUNNED at the revelation from Andrew Sentance:
Ummm, isn't that what created the mess in the first place, and isn't that EXACTLY what Mervyn King's predecessor Eddie George warned the Bank of England not to do:
8. paul said...
@devo.
'Underwater' sounds like a good candidate.
Oh, I can see that might not always work though ...
9. timmy t said...
"The Bank used three methods to calculate negative equity, which resulted in estimates of 700,000, 1m and 1.1m, or 7pc-11pc of Britain's mortgage borrowers."
I wonder how many man-hours that took - they could have surveyed people on this site in 30 minutes and we probably would have come up with a similar range.
10. Cantongoat said...
"In the last recession, "it took almost six years" to 1995 for the number of those in negative equity to hit 1.1m, the Bank said in its quarterly bulletin".
Doesn't that mean that this recession is panning out to be a more severe - but speeded up version of the last one... so logically that means the recovery will kick in earlier and take place more quickly as well?
11. d'oh said...
Paul @ 7 Ah, but you forget, they won't make the same mistakes this time... ;-)
12. george monsoon said...
listening to the news this morning, the figure reported was 1.9 million ..... or 1 in 9 people with mortgages ( I don't want to use the term homeowners, because this only applies to those who have paid off their mortgage)
13. mander said...
I know but estate agents, banker are still talking about supply and demand and not income to loan value.
14. techieman said...
Cantongoat - No it dont mean that. But that is the mistake that lots of people could very well make. The background to the nineties crash was different.