LONDON (ShareCast) - Britain's home owners paid off records amounts from their mortgages in the first three months of 2009 as they rushed to take advantage of lower interest rates.
Mortgage equity withdrawals jumped from £7.8bn in the
fourth quarter of 2008 and up from a withdrawal of £6.7bn in the first quarter of 2008.
Housing equity accounted for 3.5% of post-tax income in the first quarter of 2009, down from 6.2% of post-tax income in the fourth quarter of 2008.
Howard Archer, chief UK and European economist of IHS Global Insight, said: "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.
"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."
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