Explanatory Notes - The Bank's Estimate of Housing Equity Withdrawal
This was previously called Mortgage Equity Withdrawal.
OVERVIEW
AVAILABILITY
SOURCES
DEFINITIONS
VALUATION AND BREAKS
FURTHER INFORMATION
OVERVIEW
Housing equity withdrawal (HEW) is new borrowing secured on dwellings that is not invested in the housing market (e.g. not used for house purchase or home improvements), so it represents additional funds available for reinvestment or to finance consumption spending.
AVAILABILITY
Data are available quarterly from 1970 Q1, both not seasonally adjusted and seasonally adjusted. Publication of data will usually occur on the 4th working day following the release of National Accounts data from the Office for National Statistics or subject to the published schedule of releases.
SOURCES
HEW includes series published in the Bank’s Monetary and Financial Statistics (Bankstats) and statistics published by the Office for National Statistics available on their website www.statistics.gov.uk.
All data are subject to revision if and when new information becomes available. For more information on revisions practices see the Explanatory Note on revisions, available here.
DEFINITIONS
The Bank’s estimate of HEW is intended to measure that part of secured borrowing that is not invested in the housing market.
HEW occurs when lending secured on housing increases by more than investment in the housing stocks. Investment comprises new houses, home improvements, transfers of houses between sectors, and house moving costs, such as stamp duty and legal fees (although these fees do not add to the value of the housing stock, they are measured as investment, so reduce the funds available for consumption). So HEW measures mortgage lending that is available for consumption or for investment in financial assets (or to pay off debt).
HEW is measured as:
| Series | Code |
Source |
+ Net lending secured on dwellings |
VTVG.Q (1) |
BoE: Monetary and Financial Statistics (Bankstats) |
+ Capital grants to personal sector |
ADCE.Q |
ONS |
+ Capital grants to housing associations |
GTDI.Q |
ONS |
- Household investment in dwellings |
DLWK.Q (2) |
ONS: Blue Book (Table SUP1) |
- Household net purchases of land (Table A41) |
NSSY.Q (2) |
ONS: United Kingdom Economic Accounts |
- Household cost associated with the transfer of ownership of non-produced assets |
DLXV.Q (2) |
ONS: Blue Book (Table SUP1) |
(1) Prior to 1990 the ONS series AAPR.Q is used.
(2) From 1989. Between 1986 and 1989 the sum of these is estimated from Household sector gross fixed capital formation (NSSU.Q) and, prior to 1986, from Personal sector gross fixed capital formation.
The table above shows the identifiers for the series used. The HEW series is then seasonally adjusted using X-12-ARIMA.
Please see an article in the Spring 2001 Quarterly Bulletin and boxes on page 6 of the November 1999 and page 10 of the August 2004 Inflation Report for further details of HEW and its calculation.
VALUATION AND BREAKS
From 1990 Net lending secured on dwellings (BoE series code VTVG.Q) replaced the comparable ONS series (ONS series code AAPR.Q).
Between 1986 and 1989 the sum of Household investment in dwellings, Household net purchases of land and Household cost associated with the transfer of ownership of non-produced assets is estimated from household sector gross fixed capital formation (ONS series code NSSU.Q). Prior to 1986 these series were estimated from personal sector gross fixed capital formation. From 1989 the series listed in Table 1 of these notes are used.
Bank of England (1999) ‘Mortgage equity withdrawal', Inflation Report, November, page 6.
Davey, M (2001), ‘Mortgage equity withdrawal and consumption' Bank of England Quarterly Bulletin, Spring, pages 100-103.
Bank of England (2004) Mortgage equity withdrawal and consumption: new survey evidence, Inflation Report, August 2004, pages 10-11.
Benito, A and Power, J (2004), ‘Housing equity and consumption: insights from the Survey of English Housing' Bank of England Quarterly Bulletin, Autumn, pages 302-309.
