Homeowners 'looking to reduce debt'

Posted: 07 Jan 2010 12:17:52 GMT

UK homeowners are looking to reduce debt by pumping money into their mortgages, according to new figures from the Bank of England.

The Financial Times reports that during the third quarter of 2009 those who own a property put two per cent of their post-tax income back into their mortgage, statistics from the housing equity withdrawal figures reveal.

In total this equates to some £4.9 billion.

David Hollingworth, head of communications for London and Country Mortgages, tells the publication that he is not surprised by the figures, due to the low interest rates that homeowners are currently enjoying.

"It picks up on the fact that people are shifting away form withdrawing equity, which was prevalent in the boom period, and are looking to reduce debt, not build up a bigger one," he adds.

Low home loan rates are likely to continue into 2010 due to increased competition among lenders, Andy Pratt, chief operating officer at mortgage broker Alexander Hall states.

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