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Rise in UK mortgage repayments
Wednesday April 7th 2010
Newly published figures have revealed that the recession encouraged homeowners to repay £7.11 billion on their mortgages.
The figure peaked in the final quarter of 2009 with the public focusing on injecting money back into their properties rather than releasing equity as previously seen. The trend highlights the importance of having adequate mortgage payment protection insurance.
During the boom years a record £17.2 billion of equity was released during the final quarter of 2003, allowing consumers to take advantage of the increasing house prices.
By raising their mortgages they were able to convert some of the rise in the value of their home into money.
Debt consolidation, home improvements and big purchases were generally the areas where consumers chose to spend the cash.
But while people felt confident about increasing the size of their mortgage debt when house prices were booming, they were far less inclined to do so when they were falling and unemployment was rising, leading to the current trend to reduce mortgage debt.
House prices fell by around 20% from their peak to their trough in the first half of 2009 and, although they have since risen by around 10%, many people still have insufficient equity in their homes to withdraw money.
Copyright © Press Association 2010
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