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Housing Wealth and Recession Beverley A Searle University of Durham Housing Studies Annual Conference: 14-16 April 2010

Housing Wealth and Recession Beverley A Searle University of Durham Housing Studies Annual Conference: 14-16 April 2010 University of York . Introduction The social and economic costs of recession Mortgage Equity Withdrawal through booms and busts

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Housing Wealth and Recession Beverley A Searle University of Durham Housing Studies Annual Conference: 14-16 April 2010

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  1. Housing Wealth and Recession Beverley A Searle University of Durham Housing Studies Annual Conference: 14-16 April 2010 University of York

  2. Introduction • The social and economic costs of recession • Mortgage Equity Withdrawal through booms and busts • Conclusion: Housing Wealth in a changing climate

  3. Introduction • Changing role of housing wealth • investment versus use value • Global markets + individual risks

  4. Recession in the UK 1970-2009

  5. The Social and Economic costs of recession 1 : Unemployment

  6. The Social and Economic costs of recession 2 : Divorce

  7. House Price change and MEW

  8. Social and Economic costs of recession 3 : Repossession

  9. Mortgage Equity Withdrawal (MEW): setting the scene (Smith and Searle, 2008): • Growing trend in in-situ MEW • Amounts withdrawn are substantial • Routes of MEW – from housing repairs to welfare?

  10. Routes of MEW: • Financial Buffer (Benito, 2007; Hurst and Stafford, 2004) • Insurance (Parkinson et al, 2010) • SKIersvs Life Cycle Model

  11. Table 1: Proportion of owner-occupiers who withdraw equity Mortgage Equity Withdrawal (MEW) through booms and busts • BHPS (1994 – 2007) / Understanding Society (2008) • Sample frame: Home owners (couples + single person hh) who have not moved between waves • Equity savers (have not withdrawn equity) • Equity borrowers (have withdrawn equity)

  12. Equity borrowers: • Younger (u55) rather than older (55+) • Households with children • Employed • In a relationship • Managing debt + meeting demands: • Self-employed • Unemployed / Relationship breakdown • Stable vs changing states

  13. Wealth portfolios + debt

  14. Managing housing payments: Housing payments required cut backs

  15. Conclusion: Housing Wealth in a changing climate • Role of housing wealth is changing • MEW as an insurance: through booms and busts? • Further research..... • Recession ,Relationships and Remortgaging • Housing wealth in recession • Owner-occupation in recession

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