Figures show that the amount of borrowing against the value of their property is rising, with the mortgage equity withdrawal totalling £49.7 billion in 2006.
This figure is up from £36.6 billion in 2005.
Many economists suggested that this rising mortgage equity withdrawal rate would increase consumer spending on the high street. However from figures on retail sales this does not seam to be the case. It appears that more people are using the extra funds to pay off other debts such as credit cards, bank over drafts and other unsecured debts.
Homeowner often release equity in their properties to fund home improvements, but it should be noted that should property prices fall they may be in a negative equity situation.
At this point house prices remain robust, but there appears to be a slow down in house sales. This is particularly prevalent in the first time buyers market with would be purchasers finding it increasingly difficult to get on the property market.
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