7 April 2010

The stake invested in properties by UK home owners increased by £22.3bn over the last year, according to recent figures released by the Bank of England.

This increased figure is a reflection of the decisions by home owners to pay off more of their mortgages, combined with the lenders’ insistence that borrowers put down large deposits.

In the 10 years previous, home owners had borrowed up to £327bn against the inflated value of their homes. The extended house price boom, from the late 1990’s until around 2008, has been compared to turning people’s homes into the equivalent of a cheap credit card, as home owners borrowed cash in the form of top-up mortgages.

The equity possessed by home owners increased by more than £7bn in the first quarter of 2009 and had risen by another £4bn by the fourth quarter.

The percentage of mortgage packages requiring a 25% deposit dropped to 56% at the beginning of April this year, with the total number of mortgages on the market now standing at 1,727.

Source: BBC News

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