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Mortgage Equity Withdrawal Rises - Bbc

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http://news.bbc.co.uk/1/hi/business/4307312.stm

Last Updated: Tuesday, 4 October 2005, 09:48 GMT 10:48 UK

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Mortgage equity withdrawal rises

Experts believe the property market could be stabilising

The amount of money people are borrowing against the value of their homes has rebounded, figures show.

Mortgage equity withdrawal rose to £8.7bn between April and June from £6.44bn in the three months to the end of March, the Bank of England said.

It was the first quarterly rise since autumn 2003, when the figure mortgage equity release peaked at £17.5bn.

The figure has fallen since then, a factor which experts say helped trigger the recent consumer spending slowdown.

The latest upturn in this form of borrowing may be linked to the increase in the number of property sales in the UK this year.

Tony Dolphin, chief economist at Henderson Investors said: "Perhaps this is another sign that the housing market has stabilised."

Borrowing boom

Home owners have borrowed £198bn using mortgage equity withdrawal since the start of 2000, encouraged by rising house prices and low interest rates.

The conditions made it very cheap for people to top up their mortgages and spend the proceeds, especially as house prices were rising fast.

Mortgage equity release peaked at the end of 2003 as the Bank of England started to raise interest rates again in an effort to cool down the housing market, a move which led to a slowdown in property prices and a big fall-off in borrowing against property values.

The decline in borrowing against property has been a leading factor behind a slowdown in consumer spending over the last year.

This can be seen most clearly in the car industry where sales are currently running 6% lower than in 2004.

Meanwhile, a host of retailers such as Marks & Spencer, MFI and French Connection have warned of falling sales and profits while other names - including Allders and Courts - have collapsed.

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Tony Dolphin, chief economist at Henderson Investors said: "Perhaps this is another sign that the housing market has stabilised."

Spinner Dolphin wins this weeks award for wacky spin. If he cannot see the ominous implications of people mewing right now perhaps he should consider a career change.

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Experts? Which ones?

Shouldn't it read "Experts hope"?

The V.I. ones. Which is all of them.

You read that article an begin to wonder how many chimps the BBC actually employs?..

Absolutely no research, balance or plain old common sense in that article. I'd have said that the huge debt mountain is the reason for even higher MEW, as people unable to meet their commitments take the 'easy' route out by piling it onto their mortgage. Of course, house always go up, so no problem. Oh, and the market is stabalising, so no worries there.

Thanks heavens for 'experts' - and the BBC's inability to question anything passed to them from these experts.

Nomadd

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Hmmm so vendors being forced to buy there houses off themselves to keep their heads above water will stabilsie the market eh? :lol::o

Maybe Tony is hoping it will, whilst he offloads his BTL portfolio, or am I just being cynical?

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Data :

http://213.225.136.206/statistics/mew/2005.htm

Graphs : please notice as this looks very similar to the last crash, a small rise in MEW before plunges down towards negative values. Using the last crash as a bench mark we expect two more quarters small MEW rises as people try to bail themselves out of Credit Card debt, before MEW plunges. Its amazing how similar MEW is in this crash when you compare it to the last crash.

Last time, Mew Crashed to about 3%, this time Mew crashed to about 3%...

Last time, mew recovered by 1% in the first quarter after the the fall to 3%, this time MEW has recovered by a similar amount....

Is it different this time? If not i expect MEW to recover to about 6% or 7% over the next six mounths, Looking at the graphs we are currently at a crash date of Autumn 1989.....

MEWIncome..JPG

MEWMillions.JPG

post-552-1128421964_thumb.jpg

post-552-1128421980_thumb.jpg

Edited by moosetea

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Increased stability through more MEW.

Obviously on crack. :lol:

people realise this is their last chance to get some cash from the banks using their house prices as a guarantee.

they realise that in a years time the banks wont be so keen to let them MEW when prices are falling in real terms.

people realise the game that is being played and they are just playing it to get as much debt as they think they can handle.

off course many wont be able to handle it.

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Thanks heavens for 'experts' - and the BBC's inability to question anything passed to them from these experts.

Nomadd

actually this is a very interesting point. I have noticed lately how, whenever there is some tenuous straw-clutching article printed about "why everything is going to be OK" it is laden with multiple references to "experts". We rarely find out who these people are, and usually you get one half-ar$ed quote from some VI or other in support of the point being made.

The other example that I can think of where similar things happen is on TV adverts for cleaning products and the like... "9 out of 10 experts agree that BLAMMO is more effective at sterlising your soul than any other product currently available to impressionable consumers"

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Data :

http://213.225.136.206/statistics/mew/2005.htm

Graphs : please notice as this looks very similar to the last crash, a small rise in MEW before plunges down towards negative values. Using the last crash as a bench mark we expect two more quarters small MEW rises as people try to bail themselves out of Credit Card debt, before MEW plunges. Its amazing how similar MEW is in this crash when you compare it to the last crash.

Last time, Mew Crashed to about 3%, this time Mew crashed to about 3%...

Last time, mew recovered by 1% in the first quarter after the the fall to 3%, this time MEW has recovered by a similar amount....

Is it different this time? If not i expect MEW to recover to about 6% or 7% over the next six mounths, Looking at the graphs we are currently at a crash date of Autumn 1989.....

Brilliant graphs Moosetea. Uncanny!

Perhaps you should mail them to the BBC. Not that they'll be interested.

Perhaps this rise in MEW represents a WCRM (wylie coyote recognition moment). Everyone stopped running (MEWING) for a while and now they've just looked down! This is now the last bit where his body falls and the neck streaches logner and longer.

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Brilliant graphs Moosetea. Uncanny!

Perhaps you should mail them to the BBC. Not that they'll be interested.

Yes, the BBC would be very interested - but only if Moosetea claimed to be an 'expert'. :D

Nomadd

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Tony Dolphin - gotta be a made up name

Reminds me of the junk mail i used to get from Readers Digest. Always signed by:

Tom Champagne!

(remember those?)

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Tony Dolphin

Something sounds fishy there.......

How about the correlation between personal MEWing and National MEWing of a sort. Is Gordon Brown borrowing now to pay for day to day running of the country, knowing that he will soon reach an Armageddon Day where even these figures won't balance.

This is what is happening now with personal borrowers; see the play below:

" Oh dear Doris we are in trouble; lets re-mortgage and clear our debts"

"good idea Henry"

Doris and Henry re-mortgage on a 'self cert' and get another £50k to pay off credit cards and outstanding hp bills.

"Why don't we get a new car too while we are at it? Its only another £20k dear"

etc. etc.

What then?

Last person out turn off the lights.

JD :ph34r:

Edited by john_d_uk

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Tony Dolphin

Something sounds fishy there.......

Nice try, but the dolphin is a warm blooded mammal (unlike an EA) :):)

A trip to the over to visit the "Karma Comedians" (expats) might give a clue as to the rise in MEW. Many are now realising that the game is up and they won't be able to sell so they are releasing the equity jumping on a plane and hoping to rent their UK places out.

The advice that the wannabee ex-pats are giving out to each other is frightening.

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Guest

A colleague is MEWing £5K to do his kitchen. Coz he can't move even though he wants to. Can't move because he can't sell his house. In turn, because he can't find a buyer.

But at least he's candid about the price business. "I don't even want £120K for my terrace! Who'd want to pay £120K to live in a sh1te-hole like Wibblewich! I only paid £45K"

The gist of the problem was that the next man wasn't prepared to accept less.

NB: Place name changed to protect the guilty

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Guest Riser
Data :

http://213.225.136.206/statistics/mew/2005.htm

Graphs : please notice as this looks very similar to the last crash, a small rise in MEW before plunges down towards negative values. Using the last crash as a bench mark we expect two more quarters small MEW rises as people try to bail themselves out of Credit Card debt, before MEW plunges. Its amazing how similar MEW is in this crash when you compare it to the last crash.

Last time, Mew Crashed to about 3%, this time Mew crashed to about 3%...

Last time, mew recovered by 1% in the first quarter after the the fall to 3%, this time MEW has recovered by a similar amount....

Is it different this time? If not i expect MEW to recover to about 6% or 7% over the next six mounths, Looking at the graphs we are currently at a crash date of Autumn 1989.....

Nice Graphs Moosetea, I was interested how the timing matched the other data so I have ploted data from your source on my graph of Nationwide data. I scaled the MEW data on a different axis to make it more clear.

It looks like MEW data is now a confirmation signal that the market is about to crash :)

MEW data confirms Nationwide HPI sell signal

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Nice Graphs Moosetea, I was interested how the timing matched the other data so I have ploted data from your source on my graph of Nationwide data. I scaled the MEW data on a different axis to make it more clear.

It looks like MEW data is now a confirmation signal that the market is about to crash :)

MEW data confirms Nationwide HPI sell signal

Flipping Heck that really is a GREAT match :) Its like one huge Sell signal, with flashings lights and whistles

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(...)

It looks like MEW data is now a confirmation signal that the market is about to crash :)

MEW data confirms Nationwide HPI sell signal

Scary! That graph screams 'SELL! SELL!! SEEELLLL!!!' right into your face!!!

I lost a bit of money when the stockmarket bubble burst in 2000 but at the moment I'm learning a lot by simply watching another bubble drama unfold...

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      • down 5% +
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