Using household wealth

Based on article from The Telegraph, 9 October 2006

The average disposable wealth in Britain has dropped below £40,000 as house price inflation lags far behind the rise in home equity withdrawals. Whereas house prices increased by 5%, equity withdrawals increased by 15%, showing the extent of which people are using their properties to withdraw money.

Last year, £50bn was taken out, which has reached £12.51 in the first quarter. This is the same as 4% of GDP. This huge spending using home equity withdrawals cannot go on for much longer if disposable wealth is not growing at the same rate as spending.

As a result of low interest rates, the effect has not been felt quite so hard.