Friday, October 01, 2010
The meaning of housing equity withdrawal
Posted by David Smith at 11:00 AM
Category: Thoughts and responses

UK households have injected a net 44 billion of equity into housing over the past two years, reversing the pattern of equity withdrawal witnessed during the long upturn. The phenomenon is mainly due to older people leaving the housing market and fewer newer entrants, and those new entrants generally having lower loan to value ratios.

This is what the Bank of England, which prepares the data, said:
"Housing equity withdrawal (HEW) was -6.2bn in Q2 2010, slightly more negative than the Q1 2010 figure of -5.3bn (revised down from the previous published figure of -3.2bn). Individuals have injected 44.2bn into housing equity since Q2 2008 (when the HEW measure turned negative). HEW as a percentage of post-tax income was also slightly more negative than the previous quarter, at -2.5% compared to -2.1% in Q1 2010 (down from the previously published -1.3%)."

Manufacturing growth weakened slightly in September. The purchasing managers' index for the sector slipped from 53.7 to 53.4.