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Mortgage debts being paid off

Britons reduced their mortgage debt by a record £9.1 billion during the second quarter of the year, official figures showed.

A sluggish housing market, low returns on savings and economic uncertainty have put people off taking their cash out of their homes, leading to housing equity withdrawal being negative in every quarter since the spring 2008.

The Bank of England confirmed that its latest data showed the highest negative figure since comparable records began in 1970.

Analysts said the record net injection of housing equity reflected people's desire to improve their personal finances and cut their debt, against a background of high unemployment.

Low savings interest rates, as the Bank maintains its base rate at a historic 0.5 per cent low, have increased the attraction for many people to use any spare cash left over to reduce their mortgages.

Copyright © Press Association 2011

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