Homeowners take record cash from home value

Homeowners take record cash from home value

Friday, April 02, 2004

Cash equivalent to almost a third of all high-street spending is being taken out of equity in peoples homes.

And consumers are now even more dependent on extracting cash from their homes than at the peak of the late 1980s housing boom, revealed figures from the Bank of England yesterday.

The Bank of England said yesterday a record £16.9bn was raised through equity release during the final three months of 2003, up from £13.5bn during the previous quarter.

£mn (SA)
2002 Q4	2003 Q1	2003 Q2	2003 Q3	2003 Q4
11,810	11,773	11,438	13,550	16,185

Mortgage equity withdrawal (MEW) has become increasingly popular as Britons make use of low interest rates and increasingly high house prices to fund home improvements, lifestyle changes or reduce debts.

Simon Rubinsohn, economist at Gerrard predicted that UK MEW was not likely to moderate during 2004 and was set to top £60 billion. "Given the relatively cheap cost ... and the sharp rise in house prices, it is hardly surprising that consumers made this choice," said Rubinsohn.

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