Homeowners Begin To Rebuild Lost Equity

The Bank of England has release figures suggesting homeowners are repaying their mortgages at the fastest rate since the first quarter of last year, with £6.2bn in capital repayments being made in the second quarter of 2010. The increase follows a recent survey from Santander, which suggested consumers had stopped saving in favour of repaying their debts. However, this latest data indicates that savers may have simply swapped investment in their bank account for their property.

David Smith senior partner at property consultants Carter Jonas, said “The British public continues to batten down the hatches and pay down its debt. People are doing the exact opposite of what Charlie Bean and the Bank of England would have them do, namely spend … Homeowners have been reducing their mortgage debt for two years now, and this deleveraging will be for the long-term benefit of the property market and economy as a whole.”

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