Jump to content
House Price Crash Forum
Sign in to follow this  
justanewbie

Mew Money -- Not Into Property !

Recommended Posts

The recent upsurge in MEW borrowing appears

not to have resulted in house purchasing.

Instead the extra cash has disappeared...

perhaps into the bouncing stock market ..

or perhaps to merely keep afloat, paying

bills.

If so, then NE looms closer for many.

=================================

An interesting graph from another post, showing

a very similar pattern from the last boom - a downturn,

then a false recovery .....

http://www.housepricecrash.co.uk/forum/ind...pe=post&id=1610

Edited by justanewbie

Share this post


Link to post
Share on other sites
The recent upsurge in MEW borrowing appears

not to have resulted in house purchasing.

Instead the extra cash has disappeared...

perhaps into the bouncing stock market ..

or perhaps to merely keep afloat, paying

bills.

If so, then NE looms closer for many.

Paying off credit card debts.

Share this post


Link to post
Share on other sites
You can't put MEW money into new purchases! You need to take a separate mortgage out for that ... surely you knew that?

MEW money is just secured lending. People sometimes use it for home improvement or buying a car or paying their credit card debts. The fact that we have less MEW this year than last means that people are trying to pay their debts off and not MEW anymore! Which is good news for all.

I may have this all wrong, but I think what is ment by MEW for new purchases is MEW for the deposit on a new property. A lot of amateur BTL's do this.

Share this post


Link to post
Share on other sites
I may have this all wrong, but I think what is ment by MEW for new purchases is MEW for the deposit on a new property. A lot of amateur BTL's do this.

Exactly.

And the past three years have also seen MEW money released

being used to pay cash for properties.

It fuelled the BTL market - folk in the south east releasing

50-100K from their houses to buy cottages in wales and so forth.

But not now.

The MEWing goes on -- but not to purchase property.

Share this post


Link to post
Share on other sites
You can't put MEW money into new purchases! You need to take a separate mortgage out for that ... surely you knew that?

MEW money is just secured lending. People sometimes use it for home improvement or buying a car or paying their credit card debts. The fact that we have less MEW this year than last means that people are trying to pay their debts off and not MEW anymore! Which is good news for all.

The Bank of England definition is:

The Bank’s estimate of mortgage equity withdrawal (MEW) is intended to measure that part of secured borrowing that is not invested in the housing market. It takes the increase in housing finance (net mortgage lending and capital grants) and subtracts households’ investment in housing (purchases of new houses and houses from other sectors, improvements to property, and the transactions costs of moving house).

So MEW is measured as:

+ Net lending to individuals secured on dwellings

+ Capital grants for housing paid to the personal sector and housing associations

- Household sector investment in dwellings

- Net transfers of land to the household sector

- Household transfer costs and transfers of dwellings between sectors

Mortgage Equity Withdrawal

Edited by Sledgehead

Share this post


Link to post
Share on other sites

Edit: Sledgehead posted a more detailed explanation a good half hour before me. Next time I will double check before posting :o

The recent upsurge in MEW borrowing appears

not to have resulted in house purchasing.

Correct, even if by definition ;) MEW is money taken *out of* housing.

The first definition google came up with is at the beginning of chapter 2 of http://www.cml.org.uk/servlet/dycon/zt-cml...reps_34full.pdf

Net mortgage equity withdrawal (MEW) can be broadly defined as the flow of secured

lending out of the owner occupied housing market after taking into account all

injections and withdrawals i.e. secured lending spent on things other than house

purchase or home improvements.

Thanks,

MoD

Edited by MongerOfDoom

Share this post


Link to post
Share on other sites
Guest Charlie The Tramp
The recent upsurge in MEW borrowing appears

not to have resulted in house purchasing.

Yes it has to a large extent, where do you think all the money came from to purchase those holiday homes abroad. You can bet not from their piggy banks. :(

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.