1. Changes in the stock of secured lending when households take out or repay debt;
2. Changes in the stock of housing wealth, e.g. when new properties are built or improvements are made to existing properties,
3. Revaluations of the stock of housing wealth due to changes in house prices.
The balance of the first two ways of changing equity, i.e. excluding revaluations, in each period is classed as housing equity withdrawal (HEW).
When households, in aggregate, are withdrawing more equity than they are injecting, HEW is positive. When they are injecting more than they are withdrawing, HEW is negative.
For a more practical interpretation of these concepts, please refer to an article in the 2011 Q2 Quarterly Bulletin.
HEW occurs when withdrawals of housing equity by the household sector are larger than injections of equity.
|+ Net lending secured on dwellings||VTVG.Q (1)||BoE: Database|
|+ Capital grants to personal sector||ADCE.Q||ONS|
|- Household & NPISH investment investment in dwellings excluding land||DLWK.Q (2)||ONS: Blue Book (Table SUP1)|
|- Household net purchases of land (Table A41)||NSSY.Q (2)||ONS: United Kingdom Economic Accounts|
|- Household & NPISH costs 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.
Valuation and Breaks
To improve consistency across lending flows data published by the Bank, the compilation of housing equity withdrawal (HEW) series changed to no longer include lending and capital grants to housing associations in Q1 2015 data. The change aligned HEW with changes to lending to individuals publications described in Statistics article, April 2015, “Changes to the treatment of loan transfers and lending to housing associations”.
From 1990, Net lending secured on dwellings (BoE series code VTVG.Q) replaced the comparable ONS series (ONS series code AAPR.Q).
For further information on valuation and breaks in the VTVG.Q series, please refer to the total lending to individuals page.
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.
Series DLWK and DLXV are produced by the Capital Branch at the ONS. These series are comprised of “new dwellings plus improvements by housing associations, householders or landlords”. They are a combination of survey data from household expenditure, private sector capital expenditure and construction plus standard VAT rates.
Housing equity withdrawal since the financial crisis, Reinold, K (2011) Bank of England Quarterly Bulletin, 2011 Q2, Pages 127-133.