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Mortgage debts down by £8bn as house prices fall

Friday, 3 July 2009

UK homeowners reduced their mortgage debt by a record £8.14bn during the first quarter of the year, figures showed today.

Falling house prices and the economic downturn have put people off taking money out of their property, leading to equity withdrawal being negative for the fourth quarter in a row.

The rate at which people are repaying their mortgages has also continued to accelerate compared with the final quarter of last year, when home-owners made net mortgage repayments of £7.76bn, according to the Bank of England.

Homeowners' focus on paying down their mortgages is in stark contrast to figures for the same period of last year, when people released £6.73bn from their properties to fund large purchases, although this was itself the lowest figure for six years.

But while people's focus on paying down their debt may be more prudent than tapping into their housing wealth to supplement their spending, it is bad news for beleaguered retailers.

Equity withdrawal accounted for 2.9% of people's post-tax income during the first quarter of 2008, but during the first quarter of this year, they spent the equivalent of 3.5% of their pay paying down their mortgage.

This turnaround is likely to have contributed to the fall in consumer spending seen during the first three months of the year, with figures from the Office for National Statistics released earlier this week showing the biggest drop in spending since 1980 in the quarter.

The latest figures are a far cry from the record £17.09bn of equity that was unlocked during the final quarter of 2003.

Equity withdrawal enables homeowners to cash in on rising house prices by increasing their mortgages to convert some of the rise in the value of their home into cash.

The money is typically used to fund big purchases such as cars , home improvements, or for debt consolidation. People are less confident about increasing debt when house prices are falling.

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MAKE UP YOUR MIND.............

House prices rise again

Tuesday, 30 June 2009

House prices rose for the third time in four months during June as the market was boosted by a shortage of properties being put up for sale, figures showed today.

Mortgage debts down by £8bn as house prices fall

Friday, 3 July 2009


UK homeowners reduced their mortgage debt by a record £8.14bn during the first quarter of the year, figures showed today.

Posted by Merit | 04.07.09, 20:39 GMT

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When an economy is based on credit it will always fail at some period of time. An economy based on people having well paying employment is the key to success for the long term. It is that disposable income that keeps money circulating. Credit in itself is not bad,but it is knowing how much credit that one can afford is paramount.

Posted by RMS | 04.07.09, 15:20 GMT

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NI Travel and Tourism Awards

  • Sean Crummey entertains guests at the Northern Ireland Travel and Tourism Awards 2009
  • Sean Crummey, Maureen Ledwith and Nan Short with Craig Doyle at the Slieve Donard Resort and Spa at the Northern Ireland Travel and Tourism Awards 2009
  • Rowan Devereux and Ciaran Mulligan of Blue Insurances with Craig Doyle at the Slieve Donard Resort and Spa at the Northern Ireland Travel and Tourism Awards 2009

NI Travel and Tourism Awards

Deloitte Technology Fast 50 Awards

  • From left to right, Daniel McRitchie (Andor Technology, placed 48 in this year?s Fast 50 ranking); Mark McCusker (Texthelp Systems Ltd, placed 40th in this year?s Fast 50 ranking); Trevor Jordan (Andor Technology); and Seamus Scullion (Texthelp Systems Ltd).
  • James Greer, proprietor of Greer Publications, presents the ?Rising Star? award to Mary McKenna and Paul McElvaney of Learning Pool Ltd.
  • From left to right: Daniel McRitchie and Trevor Jordan of Andor Technology.

Deloitte Technology Fast 50 Awards

CEF Construction Awards 2009

  • CEF Construction Awards 2009
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  • CEF Construction Awards 2009

CEF Construction Awards 2009

Newry Chamber of Commerce Banquet

  • Newry Chamber of Commerce Banquet. Thursday 8 October 09
  • Newry Chamber of Commerce Banquet. Thursday 8 October 09
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Newry Chamber of Commerce Banquet

Connecting Employers to Communities

  • The Connecting Employers to Communities event hosted at Hillsborough Castle by Business in the Community on 23 September 2009.
  • The Connecting Employers to Communities event hosted at Hillsborough Castle by Business in the Community on 23 September 2009.
  • The Connecting Employers to Communities event hosted at Hillsborough Castle by Business in the Community on 23 September 2009.

Connecting Employers to Communities

Ulster Tatler Awards 2009

tatler awards.

In pictures: Doing the business

  • Tom AIMS to help local manufacturersMissouri businessman Tom Gordon joins Jenny Palmer of Lisburn City Council and councillor William Humphrey to launch the Advanced Industry Saving Programme (AIMS) programme, which helps manufacturers reduce costs by improving the flow, quality and sustainability of materials. Mr Gordon, from Missouri Enterprise, is the guest speaker at workshops in Dunmurry?s Beechlawn Hotel this week
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  • Zelda Sacoto and Ewen Friers of local band 'Axis Of' were amongst the first to try out Ulster Bank's new banking 'app' for the iPhone, which is launched today. iPhone users were given a demonstration of the app at The Oh Yeah Music Centre in the Cathedral Quarter, which has hosted gigs for the likes of Elbow, Gary Lightbody, Tim Wheeler from Ash, and Duke Special. This is the first banking app offered by a Northern Ireland bank. It allows users to manage their bank account via their iPhone.

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