Brits Pay Off a Record Sum on Their Mortgages in Q1

The latest report by the Bank of England suggests that the residents of the UK have paid back a record sum of £8.1 billion on mortgages loans in the first quarter of 2009. The fact is being explained by extremely low mortgage interest rates, which allowed the Britons to repay their debt. According to the Bank of England, £8.1 billion is the largest sum injected by UK homeowners into their mortgage debts since the beginning of Central Bank’s records in 1970. The report on mortgage equity withdrawal, published by the Bank of England, revealed that the first quarter of 2009 was marked by an increase in of injected capital by £0.3 billion – from £7.8 billion to £8.1 billion – and by £1.4 billion – from £6.7 billion to £8.1 billion – in the 4th and in the 1st quarters of 2008 accordingly. The significant rise in the amount of capital injected in the housing sector suggests that homeowners are taking advantage of low interest rates in order to repay their mortgage debt as quickly and as cost-effectively as possible. Mortgage brokers are also determined that the Brits realize that low interest rates make these days a high time to reduce mortgage debt; the fact finds its proof in the reduced reliance of UK residents on credit. Experts also claim that the figures, published by the Bank of England, reflect the limited availability of mortgages and the fact that borrowers with little equity are unwilling to take on extra debt. IHS Global Insight’s chief economist in the UK and Europe, Mr. Howard Archer, declared that housing equity withdrawal has been made unattractive by decreased property prices, while restricted lending conditions have made this process quite complicated. Moreover, he added, the interest rates on savings accounts, which have reached their historic low, made it much more reasonable to reduce the mortgage loan rather than to put money on savings accounts.