Homeowners stop borrowing against the equity in their properties

Between July and September of this year borrows increased the equity in their homes by £5.7 billion instead of withdrawing it by borrowing on the strength of the property value, this is the largest cash injection since 1970 when records began according to the Bank of England.

With the lack of funding and falling house prices it is now very difficult for a homeowner to borrow against the value of their home, which had become a convenient way for many to fund other spending including home refurbishments.

Homeowners are extremely scared at the moment to touch the equity in their homes, that’s indeed if with the falling house prices they have any equity left. With the rising unemployment people are trying to get their debts down rather than adding to them according to a mortgage broker at Cobalt Capital.

It’s now the case that homeowners are trying to cut their living costs down rather than increase their mortgage payments, with the number of live in landlords advertising for lodgers more than doubling in recent months.

Source: Telegraph

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