Mortgage repayments at record level

Category: Mortgages
Date: 7/3/2009

Figures from the Bank of England show that homeowners paid off a record amount of their mortgages in first quarter of 2009.

In the three months, the Bank estimates a total of £8.1 billion of home loans were repaid, up from the revised figure of £7.8 billion that was recorded in the final quarter of 2008.

In the year to the end of March, homeowners paid off £23 billion on their mortgage repayments.

As the property market has declined, homeowners have found it increasingly difficult to release equity from their homes, instead choosing to pay off large amounts of their mortgages.

Figures from the Bank show that consumers borrowed more than £300 billion in loans secured against their homes in the last nine years.

Commenting on the figures, chief economist at the Royal Institution of Chartered Surveyors, Simon Rubinsohn, said: "This is not a surprise, given the fall in house prices over the period and will have contributed in no small way to the weakness in high street spending."

He added: "There have been some tentative signs of a stabilisation in the property market but it is improbable that housing capital, in the near term, will be viewed as a source of wealth that can be drawn down by home owners to supplement their income."