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Waiting Patiently

Mewing On The Increase To Pay Off Unsecured Debt

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In recent months we have been told that the increase in mortgage lending is a sign of a strong and resurgent housing market. As many of us knew, however, this is not the case and much of this MEW is being used by people to keep on top of their existing debts. Cut through the spin and you will see the reality.

I can see why people do it. Secured lending on your house is cheaper to service than unsecured debt like credit cards.

But taking out new debt to service existing debt eh ?. Doesn't sound very healthy to me and suggests that the end-game for the house price bubble and the consumer spending boom it fuelled is close at hand. What is left then for Brown's "miracle economy" ?

Mortgage lending has been rising in recent months, leading some experts to assume house prices will continue to rise rapidly. However, much of this lending is to people increasing their mortgages to pay off unsecured debt.

According to Bank of England figures, the amount families are extracting from the value of their homes has risen to the highest level in two and a half years. Mortgage equity withdrawal rose to £12.5bn in the first quarter of the year, up from £12.1bn in the previous three months.

Economists said this helped explain why consumer spending had staged a modest comeback, following one of the worst winters for the high street on record.

Edit. Forgot the link :

Daily Telegraph

Edited by Waiting Patiently

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there was a good articule about paying off ones cc debt with mew. it concluded that actually, when you do the sums, it works out much more expensive. as people choose to borrow over 20-25 years on mortgages. and therefore the interest paid adds up considerably.

not forgetting that once they have cleared the cc debt they now have more credit to spend

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  • 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%

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