The Bank of England reported at the weekend that UK borrowers managed to reduce their mortgage debt by a total of £8.6 billion in the third quarter of 2011, although it insisted that there was “little sign” that Britons were trying to repay their home loans faster than in previous years.

The Bank’s report said that the main reason for the larger mortgage repayments was reduced activity in the UK housing market coupled with less remortgages last year.

With the institution sticking with its historical 0.5 per cent low base rate of interest both last year and the foreseeable future, homeowners have been taking advantage of the situation to rebalance their books by using spare funds to reduce the amount of their existing mortgages rather than take out new loans. Since the credit crunch of 2008, there has also been an upward trend when it comes to householders injecting equity into their finances – there was a record £9.6 billion injection of housing equity recorded between April and June 2011, and the total amount since summer 2008 has reached a total level of more than £100 billion – although the Bank stressed that this was not connected to increased mortgage repayments.

In a statement, the Bank commented: “The fall in housing equity withdrawal since the financial crisis is likely to reflect a fall in the number of housing transactions, with little sign that households in aggregate are making an active effort to pay down debt more quickly than in the past.”

When it comes to property prices themselves, they are down by some 10 per cent across the UK, compared to peak levels, a report by the Nationwide building society revealed last week. Although lower prices are good news for people seeking a mortgage, regional house price variations could be putting many people off applying.

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