ONS ploughed £4bn into their homes in the last three months of 2009, new data from the Bank of England showed yesterday.
The £4.038bn injected into homes was the seventh successive net injection of housing equity, although it was down from £5.1bn in the third quarter and a peak of £7.1bn in the fourth quarter of 2008.
Since the second quarter of 2008, the cumulative net injection of equity stands at £36.5bn.
IHS Global Insight’s Howard Archer said: “The net injection is the consequence of the ongoing desire of many people to improve their personal balance sheets given high debt levels and still serious concerns and uncertainties over the economic situation.”
He added: “Record low interest rates over the past year has encouraged homeowners to pay down their debts and not use equity in their homes to fund purchases on credit cards.”
The £4bn is equivalent to 1.6 per cent of post-tax income. Although this is less than the peak of three per cent recorded in the fourth quarter of 2008, it is better than the 8.5 per cent housing equity withdrawal in the last three months of 2003.
With consumers preferring to pay down debt, this is adding to the constraints on spending.