Homeowners pump record £15.6bn of equity into housing market

Rock-bottom interest rates have seen homeowners paying off their mortgages at record levels, with £15.6bn paid out in the second quarter of this year.

Data from the Bank of England, published on Wednesday, showed that this was the 21st consecutive quarter of negative mortgage equity withdrawal in the UK.

In the last quarter, households paid out an astonishing 5.8% of income in mortgage equity reduction, and households have poured more than £200bn into the housing market since 2008.

The trend marks a turnaround from the early days of the financial crisis in 2008, when homeowners borrowed capital against the value of their homes, using the extra money to fund spending.

Speaking to the Guardian, Howard Archer, UK economist at consultancy IHS Global Insight, said: “On the face of it, the record net injection of housing equity in the second quarter of 2013 suggests that there is an ongoing strong desire and perceived need of many people to improve their personal financial balance sheets given still high debt levels.”