Mortgage Debt Drops as Consumers Watch Recovery
The latest research reveals homeowners are trying to pay off their mortgages. Instead of borrowing new money, citizens of the UK are focused on pumping money into their houses and increasing the amount of equity. This could be the reason there are less homeowners seeking remortgage than there were last year.
According to the Bank of England, homeowners paid off their mortgage debt to the tune of 3.2 billion pounds over the first quarter of this year alone. More people are holding on to their home equity, instead of opting for things like home improvements or debt consolidation. This has occurred for the eighth straight quarter. The recession has created a "wait and see" philosophy, especially in the housing market. Howard Archer, Chief UK and European economist with IHS Global Insight said: "The eighth successive and still marked, net injection of housing equity in the first quarter of 2010 is the consequence of the ongoing desire of many people to improve their personal balance sheets."