Homeowners are increasingly choosing to pay off their mortgages rather than take equity out of their property, the Bank of England has revealed. Due to extra overpayments, people homeowners paid an additional £8 billion off their mortgages in the final three months of 2008, up from £5.9 billion in the third quarter of the year. The figure implies that money was injected into housing equity rather than withdrawn. With the latest figure equating to 3.3% of post tax income, Simon Rubinsohn, RICS chief economist, said it demonstrates the damage the collapse in the housing market has had on the wider economy. "The constraint on household borrowing from the loss in value of residential property contributed in no small way to the 1% decline in consumer spending in Q4," he added.
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