Equity withdrawal declined in Q412
According to the data HEW as a percentage of post-tax income was -3.1% in Q412 compared to -2.9% for Q312.
The BoE said the negative figure indicates a continued injection of housing equity by households overall, with the net flow of lending secured on dwellings remaining weaker than their investment in housing. The flow of secured lending remained positive.
The BoE added that the decline in HEW and move to injections of housing equity since the start of the financial crisis has not been associated with an increase in repayments of secured debt.
Chris Love, director of Mortgage Simplicity, said: “”Housing equity withdrawal in the fourth quarter of last year, like so many quarters before it, was always going to be negative.
“It’s hard to take equity out of your home if you have none of it, or very little. Lender criteria just won’t allow it.
“Likewise, people are no longer moving home as much which is a natural catalyst for equity withdrawal.
“Housing equity withdrawal in the fourth quarter of last year, like so many quarters before it, was always going to be negative.”
Love also said that he believes that the people’s mentality has also changed as homeowners are more focussed on increasing the equity in their homes.
Love said: “In five or six years, we have witnessed a phenomenal volte face.”