Tuesday, April 10, 2007

Repeat after them “Your house is a hole in the wall cash machine”

Massive mortgages and lack of savings the main reasons why Britons have little 'disposable wealth'

Can this be true? Apparently disposable income is now calculated by subtracting what you owe, (including that on your mortgage), from what your house is worth to come up with a final figure for disposable income. When did the equity in your home become disposable income...?

Posted by converted lurker @ 12:38 PM (518 views)
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7 thoughts on “Repeat after them “Your house is a hole in the wall cash machine”

  • george monsoon says:

    Well here is another statistical VI to avoid – KBD

    How can you use equity as disposable income. Its almost as bad as calling a second mortgage “equity release”
    absolute [email protected] as per usual. Who are KBD anyway?

    No doubt this will be used to fuel Brown’s funeral pyre in the coming months.

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  • Shipbuilder says:

    Not exactly on topic, but I was in Birmingham at the weekend and was told of a house that had been on sale for over a year because the sellers ‘aren’t getting the price they want for it’. Who are these idiots? This is the problem with media-fuelled sentiment – people watch the TV property porn and only read the good news stories about London, imagine that their area is still ‘booming’, and won’t compromise their price. The thing is, becuase they had their mortgage paid off, they could afford to move without selling. I suspect this could be what’s holding prices up in a lot of places.

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  • They’re talking about disposable wealth not disposable income.
    I’ve never heard this teminology used before – possibly they should call it net asset value or something like that. I guess the main point is that people are getting poorer not richer as the amount they borrow continues to outpace the value of what they’ve bought.

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  • Ah, but they don’t call it income, now do they? They’re calling it “disposable wealth”.
    Perhaps it’s called that because house equity is so readily disposed of – either by a falling market or MEWing in a rising market. 🙂

    Tabloid economics. Not really worthy of an editorial.

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  • tony marshall says:

    “Many buyers are taking out loans worth more than the value of the property, so they can use the extra money to pay the stamp duty bill and refurbish or decorate.”

    Or even just to meet the first year or so’s mortgage payments, until they get their finances sorted out… The worrying thing is that no one really knows.

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  • yeap, modern form of slavery.

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  • Loans are one thing then add to that the ever gorowing tax burden…is our Tony and Gordon going to get a pension?

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