Consumers 'prioritising mortgage repayments'

Date:Monday 6th April 2009
Author: Max Freedman

Rather than focusing on moving up the property ladder and thereby increasing their level of indebtedness, UK consumers are increasingly prioritising reducing the size of their home loans.

This is according to Adrian Lowcock, senior investment adviser at Bestinvest, who made his comments in the wake of recently released Bank of England Figures.

According to the Bank, homeowners reduced their mortgage debts by £8 billion during the final quarter of last year.

This was the third consecutive quarter in which the amount of equity withdrawn was negative.

Mr Lowcock said: "[The figures] highlight that homeowners are more concerned with paying down their debt than they are about trading up the scale. Until this eases things are less likely to get better, although it does not mean they are getting worse."

He added that consumers currently have a lack of confidence in the wider economy, which is making them reluctant to stretch their finances.