Friday, Jul 03, 2009
Trying to Balance the Books
Telegraph: UK homeowners pay back a record £8.1bn of mortgage debt
"UK homeowners repaid a record amount of mortgage debt in the first quarter of the year, in the latest sign that the credit crunch is forcing Britons off a decade-long spending splurge.Britons injected £8.1bn to pay off their mortgage debt in the first three months of 2009, the Bank of England said on Friday, as falling house prices, greater caution and tighter credit conditions prompted a change in habits".
Posted by alan @ 05:03 PM (604 views) Add Comment
6 Comments
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1. Neil B said...
"UK homeowners repaid a record amount of mortgage debt in the first quarter of the year"...."as falling house prices, greater caution and tighter credit conditions prompted a change in habits".
Im surprised by Telegraph printing this - Falling house prices and credit restrictions don't equate to people increasing their debt repayments - People are overpaying because the interest rates have been vastly reduced - so they have more disposable income to overpay on their mortgages.
2. mark wadsworth said...
The best bit is in The Times' write-up of the same press-release:
"The net [mortgage repayments] accounted for 3.5 per cent of post-tax income in the first quarter of 2009. In contrast, net housing equity withdrawal had been 6.2 per cent of post-tax income in the fourth quarter of 2008."
So that's household spending, excl. mortgage interest, down by nearly ten per cent. Sounds like a lot to me!
3. jackas said...
I thought these homeowner people were supposed to be hard up?
Why are we slashing interest rates and printing money if they've got £8bn lying around?
No point in saving it I spose.
saving is a ****'s game, as I have found out.
4. enuii said...
As usual I suspect that the vagueness of the article masks a slightly disingenuous twist to get a good catch line. I suspect that as people are not withdrawing equity en-masse any more that the simple answer is that they are simply paying their mortgage payments as normal and the amount owed is simply gently getting lower.
There are approx 16.5 million UK mortgages currently outstanding and a little bit of maths will tell you that the amount repaid is just less than £500 per qtr or about £161 per month, i.e. just about the capital value you would be paying back on a £50K mortgage over 25 years.
A none story really.
5. Samcoupe said...
Interesting story . I wonder if the UK has learnt the hard lesson of debt yet. On a personal note I know 2 people that are trying there hardest to pay down there mortgage debt.
1. Person has cut costs at there business and is ploughing extra income into the mortgage.
2. Family the wife is taking more shifts at tescos to pay down there mortgage (mewed 2 times so I suppose there learning the hard way mew money has to be paid back)
6. Ob2002 said...
Low interest rate is ok, but printing money??? I think its a criminal act.