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Outright Owners Outnumber Mortgage Payers

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Thought this snippet from the BBC Business News Feed was significant:

House owners

The proportion of owner-occupiers in England who own their house outright was for the first time larger than the proportion of those with a mortgage in 2013-14, according to official figures. "There were an estimated 22.6 million households in England. Overall, 63% or 14.3 million were owner occupiers, of which 33% (7.4 million) owned outright and 31% (6.9 million) buying with a mortgage. This has changed from 2012-13, when equal proportions were owned outright and with a mortgage," the English Housing Survey said.

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No money in outright ownership for the banks.....? Although many of these owners will have MEW and other debts probably.

Strictly speaking, MEW stands for Mortgage Equity Withdrawal, so those who have MEWed with mortgage will count in the 'mortgage' group.

However, there's nothing in the report on secured loans. They are listed on the Land Registry, but I don't know whether anyone has done / does research on the proportion of homeowners (outright and with a mortgage) who have second charges from such loans on their property.

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That's a lot of equity that could be potentially spun into BTL if they are not getting decent annuities or interest on cash. I'm presuming most of the outright owners are older and worrying about how many cruises they can afford in retirement.

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The reason for this, not pointed out in the article is homeownership is in decline. I would think the overall number of mortgaged properties including BTL landlords is steadily on the increase.

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as this refers to 'owner-occupiers' - I assume BTL and second homes are not included (that would be an interesting stat if it included the 'accidental landlords' )

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It will be very short lived with the introduction off QE, and the resultant silly sized mortgages.

As I said on another thread household debt has been deleveraging since 2007 in real terms, so inevitably mortgage free homes will be the result. But yes, not what the ****'s at BOE want.

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As I said on another thread household debt has been deleveraging since 2007 in real terms, so inevitably mortgage free homes will be the result. But yes, not what the ****'s at BOE want.

So in essence it turns out some people did actually use ultra low IRs to pay off their mortgage rather than go on another debt-fuelled bender?

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Note the sharp rise in private renters. Many - I'm guessing most - will be renting from BTL types who do have a mortgage. So the total amount of mortages may be unchanged, or even rising.

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The reason for this, not pointed out in the article is homeownership is in decline. I would think the overall number of mortgaged properties including BTL landlords is steadily on the increase.

Spot on.

Currently 63% owner occupancy according to those figures, not that long ago it was over 70% in this country. It's a racing certainty it'll keep falling at least down to the 50-60% range that's common in continental Europe...only without the renter friendly legislation that Europeans enjoy.

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Not just a case of a large chunk of people that bought around 1989 have just come to the end of their mortgage? (and probably didn't need to/want to bother with re-mortgaging to a cheaper rate)

How are the banks going to prise these deviants back into borrowing?

help2buy-another ?

help2BTL ?

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That's a lot of equity that could be potentially spun into BTL if they are not getting decent annuities or interest on cash. I'm presuming most of the outright owners are older and worrying about how many cruises they can afford in retirement.

Why would any outright owner want to do that, young or old?....

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Not just a case of a large chunk of people that bought around 1989 have just come to the end of their mortgage? (and probably didn't need to/want to bother with re-mortgaging to a cheaper rate)How are the banks going to prise these deviants back into borrowing?help2buy-another ?help2BTL ?

Why would anyone MEW to put a deposit down on a crap BTL when they could buy outright for the same amount as a deposit in many nice places.

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Not just a case of a large chunk of people that bought around 1989 have just come to the end of their mortgage? (and probably didn't need to/want to bother with re-mortgaging to a cheaper rate)

How are the banks going to prise these deviants back into borrowing?

help2buy-another ?

help2BTL ?

Health care

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If you assume that as the old die 66% ie 2 in 3 of the properties become BTL rather than OO then this is ideal for the banks. High prices and so high mortgages and security from the LL home or other wealth. Who needs FTBs when they can be forced rent and pay the mortgages (with lower risk of default) of BTL LLs and at a higher 'business' rate than those for OO mortgages.

I think that this is the issue. A bank would rather lend against the equity in two houses than a sliver of equity in one. It's also politically easier to repo a BTL house than an OO house, and BTL mortgages are unregulated. What's not to like for the lender?

Something needs to happen to level the playing field.

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it'll keep falling at least down to the 50-60% range that's common in continental Europe...only without the renter friendly legislation that Europeans enjoy.

Just like everything about the EU. We get the negatives but not the positives.

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22.5mn households

- 6.9mn mortgages

= 15.6mn households without mortgages (either renters or owners) aka savers

Q. Why the funk are nearly 70% of households being sacrificed to bailout the other 30%, if it's not to prop-up/inflate house prices?

Come to think of it how many of the mortgaged households actually bought before 2000 when house prices were reasonable?

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