Brits inject £271bn of equity into their homes the past decade

For the first time, homeowners have injected more equity into their properties than they have withdrawn, according to research from Responsible Life.

Analysis of the Bank of England’s housing equity withdrawal data from 1970 to 2019 shows Brits have injected £271bn of equity into their homes over the past decade, a mirror image of the preceding decade in which homeowners withdrew £275bn.

Analysis shows the financial crash of 2008 was a turning point for equity withdrawal as, from June 2008 onward, it marked the first time there were 12 successive months with more equity injected into property than withdrawn.

The hangover from the crash has lingered, as Brits have consistently invested more equity into their properties than they have withdrawn in every single quarter since June 2008.

The figures suggest Brits have become a nation of home improvers rather than movers and this change in behaviour can be attributed to homeowners becoming more conservative with their spending following the financial crash.

The financial crash resulted in a fall in property transactions to nearly half of pre-crisis levels. Although sales have started to bounce back, with on average 269,735 transactions a quarter in 2019, they have still not reached the levels seen in 2007, when transactions averaged 403,453 a quarter.

Steve Wilkie, managing director of Responsible Life said, “The aftershocks of 2008’s financial earthquake continue to be felt in the property market.

“The financial uncertainty sparked by the crisis has created a generation of homeowners who are improvers rather than movers, using excess cash to invest in their property and pay down debt.

“This has helped to contribute to the inertia being felt in the property market, where transaction levels have failed to bounce back since 2008.”