You are here: Home - Uncategorized -

Homeowners free up equity for spending sprees

Written by:

The Bank of England has released figures showing that more people are borrowing money against the value of their homes rather than making a saving and investment in them.

Homeowners released around £14.6bn in the last three months of 2006 through mortgage equity withdrawal, which totalled £49.7bn for the year compared to £36.6bn in the previous 12 months.

“This massive withdrawal suggests that High Street spending could be very robust indeed this year,” said City analyst Colin Perry. “My analysis is that the money will support consumer spending, despite the recent interest rate rises and dearer mortgages, and that saving and investment will go by the board.”

But Perry warned: “There is no such thing as a free lunch, of course, and homeowners would do well to remember that the property market is not guaranteed to keep rising and that their mortgages will be bigger if they go down this route, thus exaggerating the effect of future rate rises.

“It may seem like milk and honey now, but consumers need to weigh up their outgoings with their wealth and make informed decisions on a realistic basis. Flogging off all or a lot of your equity for a short-term spending spree may not always be the best way.”


Related Posts


Tag Box




Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co... Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
Pensions in the pink again as prospects perk up

The prospects for the UK’s largest company pension schemes have brightened and their combined ‘black hole’ of deficit has shrunk...