Insurance News Archive

Equity withdrawal 'falls again'

British people are focusing on repaying their mortgage rather than spending the equity on their home, new figures reveal.

Equity withdrawal was negative for the second quarter in a row, falling to minus £5.7 billion in the three months to the end of September, according to the Bank of England.

The data contrasts starkly with the same period in 2007, when homeowners withdrew £11.4 billion worth of advances on their property and the £5.65 billion of equity withdrawal in the first quarter of 2008.

It is only the second time since 1998 that such figures have been negative, and the third-quarter results constitute the biggest net injection of equity since records began.

"Not so long ago, an Englishman's house wasn't just his castle, it was his cash machine, too. This, very clearly, is no longer the case," said Andrew Montlake, partner at mortgage broker Cobalt Capital.

Last week, the Council of Mortgage Lenders said the government needs to take further action to restore the property market by incentivising mortgage lending.

29 Dec 2008