Resources by title
Click on the banners below to find online resources specific to these Cambridge titles:
Jargon Buster
Here we look at words and concepts that have recently been in the news and suggest ways in which they can be used in your classes.
Negative Equity
What is it?
Negative equity is the term most commonly used to describe the situation in which a home owner owes more money to a mortgage lender than the mortgaged property is worth. This arises because of a drop in house prices after the purchase of a property. For example, a buyer might take out a mortgage of €200,000 in order to buy a property for €250,000. After taking out the mortgage and purchasing the property its value then drops to €180,000; the purchaser is now said to be in negative equity.
The term can be applied to any situation in which a loan is taken out to purchase an asset, but it is most commonly used within the housing market.
Why is the term in the news?
The housing market has slowed down in a number of countries but the term has particularly been in the news recently in the USA. Many people defaulting on their mortgage payments has caused houses to be repossessed by mortgage lenders and coming onto the market again more cheaply, pushing house prices down. The result is a general drop in house prices and cases of negative equity. This has in turn led to the current credit crunch, which has so destabilised the global economy in recent months
How can I use it in class?
This is a topic which can be used both on a personal and business-level though sensitivity is needed as students may be personally affected. It may therefore be more advisable to focus on the larger-scale economic view of the issue.
Points to discuss in class could be:
- Is negative equity an issue in your country?
- How active is the housing market in your country – do most people buy and sell their homes regularly, once in a life-time or never?
- At what age do people usually buy a home in your country? What do they do before that – live with their family, rent or share with friends?
- How volatile are house prices in your country – are they a good indicator of the general state of the economy and do they fluctuate accordingly, or are they fairly stable?
- Is property generally a good financial investment in your country or does it not accrue in value much over a number of years?
Bookmark with:
(what are these?)
Links
The families who bear the brunt
The Guardian
One in ten is in danger of negative equity
The Times
Surviving negative equity
The Daily Telegraph
Comments
All Jargon Busters
The Long Tail
How companies can capitalize on selling large numbers of niche items in small quantities.
Agflation
How the price of food is driving up inflation.
Retail Prices Index
How inflation can be tracked through consumer spending.
The Lipstick index
What can the sales of lipstick tell us about the global economy?
Spin-off
What is a spin-off and are they such a good idea?
Primary elections
The US primaries have been front page news for months.
Negative Equity
Why is negative equity a homeowner’s nightmare?
Greenwashing
Have you been taken in by greenwashing?
Corporate social responsibility
Why is Corporate Social Responsibility important...
Emerging markets
What are emerging markets and how might they save us all from global recession?
Work-life balance
Do you have a satisfactory work-life balance?
Watchdog
The term watchdog (or industry watchdog) is an informal...
Credit Crunch
Credit Crunch is an informal expression to denote...