Homeowners continued their current trend of reducing their mortgage debt in the first three months of this year by reducing their mortgage debt by £5.8billion.
The huge figure was just short of the £7.1billion homeowners paid off in the last three months of last year, a three month record, according to figures released by the Bank of England.
The Bank analysts revealed that the trend was occurring because of a complete lack of movement in the housing market, which is still very stale.
The added that despite the appearance that homeowners were starting to pay more money off their mortgages, it was in fact a lack of sales that were causing such high levels of equity injection.
The figures are in stark contrast to the ten year period from July 1998 to March 2008 which saw home owners borrow an extra £328billion, mostly on the back of the continued increase in their homes value.
The practice, where homeowners take extra money out through an increased mortgage off the back of the increase in value of their home is known in the market as housing equity withdrawal.
With house prices falling rather than increasing, this trend has reversed with an injection of equity into homes now far more common.
Insolvency practitioner at HW Fisher, David Birne added, “The days of the house doubling up as a cash machine are well and truly over.”
“With interest rates at their current negligible level and inflation so high, borrowers know that they are better off paying down their mortgages with any extra cash than putting money into a savings account.”
In 2010 each quarter saw housing equity injection of over £6billion with the record of £7.1billion recorded in the last quarter of the year.