Borrowing on homes falls by a staggering sixty-four per cent
As banks and building societies in the UK continue to withdraw great mortgage deals, this has affected the amount of money being borrowed by homeowners.
Figures have fallen by a staggering sixty-four per-cent in the first quarter of the year which has resulted in a seven year low.
The amount withdrawn on mortgages on equity withdrawals has fallen from £13.9 billion in the first quarter of 2007 to £5 billion this year. Taking equity from existing mortgages is way of raising finance by increasing your mortgage. This has proved to be a popular way of raising money over the past few years.
The current figure of £5 billion is the lowest it has been since the second quarter of 2001, demonstrating that homeowners are not drawing the extra equity on their mortgages.
The Chief UK and European Economist at Global Insight, Howard Archer, said that "This will add to the mounting pressure on consumer spending already coming from modest disposable income growth, rising utility bills, elevated food prices, tighter lending conditions, higher mortgage rates, increased debt levels, tighter and, now, rising unemployment.
"This reinforces belief that we are in for an extended period of consumer retrenchment."
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