Mortgage Payments Top £5.8 Billion

£5.8 Billion (GBP) of mortgage payments

During the pre 2007 economic boom with house prices rising, equity withdrawal saw many consumers use their homes like cash machines, with a significant amount of equity money being used to boost consumer spending.

The credit crunch sharply reversed this trend as overstretched consumers looked to pay down debt levels, particularly mortgages.

The latest Bank of England (BoE) figures show that £5.8 billion was paid off against UK housing debt in the first quarter of 2011, meaning equitable figures have now been negative for 12 quarters.

The Bank’s latest figures for housing equity withdrawals showed borrowers had injected the equivalent of 2.3% of their post tax incomes into their homes in the first quarter of the year.

This follows a record repayment of £7 billion, (2.8%) of post tax income in the final quarter of 2010.
Since the beginning of 2008 home owners have invested a total of £63.7 billion into paying off mortgage debt.

Prior to the bursting of the property bubble in the middle of 2008, the previous 11 years had seen significant amounts of property equity withdrawn, (including a record £13.4 billion in the first quarter of 2007).

Between July 1998 and March 2008 home owners borrowed £328 billion against the rising value of their homes.

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