The revised figure for the second quarter is a negative £2bn. These two repayment quarters follow on from thirty nine quarters of positive HEW during which homeowners released over £325 bn of equity from their homes.
During the last property slump of the 90's the period of homeowners injecting equity into their properties lasted effectively for fifteen quarters between Q4 of 1994 and Q2 of 1998, which does not augur well for the economy over the next few years if history repeats itself.
Homeowners who had previously been happy to borrow money against the value of their homes to finance the purchase of big ticket items such as cars and holidays are no longer willing, or in many cases able to do so, any more. So motor manufacturers as well as the rest of the economy could find it tough going for some time yet.
At its peak in Q4 of 2003 householders released £17 bn in equity, with the average quarterly release over the last few years running at £11.5 bn.
Assuming that the current pattern continues then somewhere in the region of £60-70 bn plus of consumer spending power will be removed from the economy each year.
