Bank of England figures released this week show that in the first quarter of 2012 the measure of housing equity withdrawal was -£8.8 billion. This is £0.3 billion lower than in quarter 4 of 2011.
Housing Equity Withdrawal as a percentage of post-tax income was -3.3% in Q1 2012, compared with -3.2% for Q4 2011.
HEW is classed as the balance of effects on the stock of housing equity from changes in the stock of secured lending when households take out or repay debt, and changes in the stock of housing wealth, for example when new properties are built or improvements are made to existing properties.
The negative figures suggest that there is a continued injection of household equity by households overall. The net flow of lending secured on dwellings has remained weaker than their investment in housing. The flow of secured lending remained positive.
The decline in housing equity withdrawal and move to injections of housing equity since 2007 and the start of the financial crisis has not been associated with an increase in repayments of secured debt. Gross secured loan repayments have fallen since 2007. This has been due to lower housing market activity and a drop in remortgaging.
An article in the 2011 Q2 Quarterly Bulletin from the Bank of England suggests that the fall in HEW since 2007 is likely to reflect a fall in the number of housing transactions. There is little sign that households are actively trying to pay back the debt more quickly than before the financial crisis.
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