Homeowners inject £5.8bn of equity in Q1

Tuesday, 05 July 2011 03:18

Homeowners injected £5.8 billion worth of equity into their properties in the first quarter of 2011, new figures from the Bank of England have shown.

This follows the record £7.1 billion in the fourth quarter of 2010, and marks the third straight year in which Britons have ploughed money into their homes overall.

Households have now added £63.6 billion to their housing equity since March 2008, the Bank's Housing Equity Withdrawal report revealed.

This trend is in contrast to the years of the housing boom - before the financial crisis hit in 2007 - when many homeowners cashed in on the relatively high value of their property.

Howard Archer, chief UK economist at IHS Global Insight, said the figures revealed a wider trend among many Britons to clear their debts.

"The ongoing appreciable net injection of housing equity in the first quarter highlights the strong desire and perceived need of many people to improve their personal financial balance sheets given high debt levels and serious concerns and uncertainties over the economic situation," he said.

"Furthermore, extremely low savings interest rates have made it much more attractive for many people to use any spare funds that they have to reduce their mortgages."

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