UK homeowners repaid a record £8.1 billion ($13.2 bn) of mortgage debt in q1’09, the biggest injection of cash in nearly 40 years.
Britons injected £8.1bn to pay off their mortgage debt in the first three months of 2009, the Bank of England said on Friday, as falling house prices, greater caution and tighter credit conditions prompted a change in habits.
The figure compares with a £7.7bn [$12.5 bn] injection in the final three months of 2008…
“Sharply falling house prices have made housing equity withdrawal increasingly unattractive, while very tight credit conditions have made it more difficult to carry out the process as well as to take out new mortgages,” said Howard Archer, chief UK economist at IHS Global Insight.
“In addition, ever lower savings rates have made it increasingly more attractive for many people to use any spare funds that they have to reduce their mortgages,” he added.[via calculatedrisk]