Finance Choices
£1,000,000,000,000 - The UK's mortgage debt
Early next month the total amount of money Britons owe on their homes will pass the £1 trillion (i.e. £1,000 billion) mark.
That is according to figures published today by the Council of Mortgage Lenders (CML), which points out that while a staggering amount, the figure is less worrying than it might at first seem.
While the amount of money Britons owe in mortgages has risen, the value of unmortgaged property has risen far faster. This means that UK home-owners are currently sitting on £3.6 trillion worth of unmortgaged property wealth.
"The £1 trillion threshold is clearly a landmark but it does not have any particular significance for policy-makers or others," said CML director general Michael Coogan.
"Although it is a milestone, it will perhaps soon be forgotten as home-ownership and mortgage lending continue to grow further.
"Over time, owner-occupation has the potential to create wealth and independence for people, and we will continue to work for the expansion of sustainable home-ownership."
The CML points out that housing equity is the largest component of the total wealth that is held by UK residents.
This increase has been fuelled by mortgage lending, with the number of people owning their own home in the UK increasing from 60 per cent of the population 20 years ago to 70 per cent now.
And the growth is not set to stop there, with 80 per cent of Britons wanting to own their own home and the government setting a goal of another million home owners by 2010.
The CML reports that even with this expansion, signs that home ownership has reached its "natural limit" are thin on the ground, meaning the amount of mortgage debt ? and housing wealth ? is set to keep climbing.
Click here to find the best mortgages with the Finance Choices mortgage guide
That is according to figures published today by the Council of Mortgage Lenders (CML), which points out that while a staggering amount, the figure is less worrying than it might at first seem.
While the amount of money Britons owe in mortgages has risen, the value of unmortgaged property has risen far faster. This means that UK home-owners are currently sitting on £3.6 trillion worth of unmortgaged property wealth.
"The £1 trillion threshold is clearly a landmark but it does not have any particular significance for policy-makers or others," said CML director general Michael Coogan.
"Although it is a milestone, it will perhaps soon be forgotten as home-ownership and mortgage lending continue to grow further.
"Over time, owner-occupation has the potential to create wealth and independence for people, and we will continue to work for the expansion of sustainable home-ownership."
The CML points out that housing equity is the largest component of the total wealth that is held by UK residents.
This increase has been fuelled by mortgage lending, with the number of people owning their own home in the UK increasing from 60 per cent of the population 20 years ago to 70 per cent now.
And the growth is not set to stop there, with 80 per cent of Britons wanting to own their own home and the government setting a goal of another million home owners by 2010.
The CML reports that even with this expansion, signs that home ownership has reached its "natural limit" are thin on the ground, meaning the amount of mortgage debt ? and housing wealth ? is set to keep climbing.
Click here to find the best mortgages with the Finance Choices mortgage guide
posted by Bruce Wayne at 10:00 AM
£1,000,000,000,000 - The UK's mortgage debt
4 Comments:
A trillion pounds is about £16.5k per man woman and child in the Uk. This is a lot when you consider half the population is economically inactive and the debt isn't evenly spread between those who ARE active, it's massively skewed onto people in their 20s and 30s.
Couldn't agree more about the pain that low inflation will cause the economy on the medium to long term.
Unfortunately it will hit households randomly over a 20 year period depending on when the mortgage was taken out. In itself it will not cause enough pain to create a house price crash. Just a much slower than normal economic growth - bad news for anyone retiring in 40 - 50 years.
I met some of our new neighbours last night. One had been there 41 years, the other 22. So, unless they've been MEWing for Britain no mortgage debt problems there. Their children and grandchildren may not have the same luxury though.
Our household debt averages £90K for every man woman and child. Although we will reduce to 75K average by the end of this week.
Total mortgage debt in America is approaching $9 trillion (almost 5 trillion pounds).
The population is five times that of Britain as well.
What is interesting in the US and to a little bit less of an extent in the UK is how the secondary markets has allowed the mortgage, and credit markets in general to flourish. If you asked most people the largest capital market sector, most will say stocks, or US debt, when in reality the structured finance market dwarfs them in comparison.
For good or for bad the structured finance market is what has made it so easy to get a mortgage, home equity, credit card or auto loan.
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