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Your support makes all the difference.Britons reduced their mortgage debt by £8.8 billion in the first quarter of this year as the housing market remained subdued, Bank of England figures showed today.
The figures indicate that households are putting more money into the housing market, through deposits or mortgage repayments for example, than they are taking out, with a cumulative £122 billion injected since the summer of 2008.
However, the Bank said there was "little sign" that households are trying to pay down debt more quickly than in the past, and a lack of activity in the housing market and a reduction in re-mortgaging are underlying the figures.
Several surveys have forecast house sales to remain sluggish this year, with continued uncertainty over the economy and the eurozone and lenders predicted to tighten their borrowing criteria further and raise their rates.
There has been a general trend towards injections of housing equity since the start of the financial crisis, with a reduction of nearly £8.6 billion in mortgage debt in the final quarter of last year.
The latest figure shows that households spent the equivalent of 3.3% of their post-tax income on reducing their mortgages.
However, the figure remains below a record net injection of £10.1 billion seen during the spring last year.
The weak and patchy housing market has left many people with insufficient equity in their homes to withdraw money, while home owners could also find it harder to increase the size of their mortgage due to the tighter criteria being applied by lenders.
Analysts said the trend towards an injection of cash rather than a withdrawal seen for 16 quarters in a row could have a restricting effect on consumer spending, affecting the wider economy.
Howard Archer, chief UK and European economist at IHS Global Insight said that despite the Bank playing down people's desire to pay down their debt more quickly as a factor, poor returns on savings have "undeniably" made it more attractive for people to use any spare funds to reduce their mortgages.
He said: "House prices currently remain soft, which could well further encourage a net injection of housing equity in the near-term at least along with the very worrying economic outlook and deteriorating labour market."
Vicky Redwood, chief UK economist at Capital Economics, said: "The low level of transactions has also reduced the opportunity for households actively to withdraw equity when they buy a house or remortgage.
"And for many households, this will therefore have reduced the funds they have available to spend.
"The need to keep loan-to-value ratios low in order to get the best mortgage deals may also have discouraged some people from withdrawing equity."
She added: "Looking ahead, the combination of tight credit constraints, falling house prices and weak consumer confidence is likely to keep equity withdrawal falling for some time yet."
PA
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