Two years ago equity withdrawal from re-mortgaging property was running at around £14 billion a quarter, a rate of over £55 billion per year. But now the tide has turned, and by a massive amount.
In the first quarter of this year it was a net mortgage repayment, not withdrawal, we actually repaid over £8 billion in mortgage debt, at this rate it equates to over £36 billion per year “repaid”. These are truly astonishing figures.
It is not difficult to see the effect this has on the UK economy, a swing from £55 billion potential spending (from mortgage withdrawal) to £36 billion cut-back in spending as mortgage debts are repaid. No wonder our high street retailers report such declines in sales.
But perhaps more interestingly, with such large amounts of mortgage debt being repaid, why aren’t banks doing more to lend to people to buy their own home? Surely the net repayment of mortgage debt would enable the banks to do more for those trying to buy their own home? It would seem that the tax-payer-backed banks are having their cake and eating whilst we struggle to pick up a few crumbs.
Come on banks, help us property buyers!
