Home
News
In Focus
Business
Metro
Nation
World
Sports
Feature
Opinion
View more »Opinion Columns
Wan LixinOpinion deputy editor of Shanghai Daily
Restaurants get off to a quick start thanks to game-changing policies
High service charges on event ticket refunds call for further regulation
Sunday
- Subscribe
Related News
Mortgages paid down at fast rate in Britain
Source: Agencies |
July 4, 2009, Saturday
|
Print Edition
Print Edition
UNITED Kingdom home-owners paid down mortgage debt in the first quarter at the fastest rate in a year, shrinking the pool of money available for retail spending, the Bank of England said yesterday.
The bank estimated that mortgage holders paid off 8.1 billion pounds (US$13.23 billion) in the quarter, compared to 7.8 billion pounds in the fourth quarter of 2008 and 5.8 billion pounds in the third quarter.
In the first quarter of last year, homeowners borrowed 6.7 billion pounds against their properties. The figure, known as "housing equity withdrawal," measures secured borrowing not invested in housing but is available for other consumption.
Withdrawal of housing equity accounted for 2.9 percent of post-tax personal income in the first quarter of 2008, but in 2009 homeowners spent 3.5 percent of their income repaying debt, the bank said.
With house prices falling 10 percent to 15 percent in the last year, homeowners have less equity to borrow against and a growing number have fallen into negative equity.
Simon Rubinsohn, economist at the Royal Institute of Chartered Surveyors, said the first quarter figure was no surprise given the fall in house prices, and this would have cut into retail spending.
"There have been some tentative signs of a stabilization in the property market but it is improbable that housing capital, in the near term, will be viewed as a source of wealth that can be drawn down by home owners to supplement their income," Rubinsohn said. "We expect consumer spending to remain relatively subdued over the remainder of this year."
Howard Archer, chief economist at Global Insight, said equity withdrawal has also become less attractive as banks tighten up on lending.
"In addition, ever lower savings rates have made it increasingly more attractive for many people to use any spare funds that they have to reduce their mortgages," Archer said. "Housing equity withdrawal has been used significantly to support consumer spending in recent years."
The bank estimated that mortgage holders paid off 8.1 billion pounds (US$13.23 billion) in the quarter, compared to 7.8 billion pounds in the fourth quarter of 2008 and 5.8 billion pounds in the third quarter.
In the first quarter of last year, homeowners borrowed 6.7 billion pounds against their properties. The figure, known as "housing equity withdrawal," measures secured borrowing not invested in housing but is available for other consumption.
Withdrawal of housing equity accounted for 2.9 percent of post-tax personal income in the first quarter of 2008, but in 2009 homeowners spent 3.5 percent of their income repaying debt, the bank said.
With house prices falling 10 percent to 15 percent in the last year, homeowners have less equity to borrow against and a growing number have fallen into negative equity.
Simon Rubinsohn, economist at the Royal Institute of Chartered Surveyors, said the first quarter figure was no surprise given the fall in house prices, and this would have cut into retail spending.
"There have been some tentative signs of a stabilization in the property market but it is improbable that housing capital, in the near term, will be viewed as a source of wealth that can be drawn down by home owners to supplement their income," Rubinsohn said. "We expect consumer spending to remain relatively subdued over the remainder of this year."
Howard Archer, chief economist at Global Insight, said equity withdrawal has also become less attractive as banks tighten up on lending.
"In addition, ever lower savings rates have made it increasingly more attractive for many people to use any spare funds that they have to reduce their mortgages," Archer said. "Housing equity withdrawal has been used significantly to support consumer spending in recent years."
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
