In fact, lower mortgage and housing activity levels have been widely simplified to householders overpaying, said the Bank today.
Back in 2011, the BoE reflagged its own report today, saying it is tempting to interpret data as an active effort by households to pay down debt more rapidly than in the past, but “it is not clear that this is the case.”
However, industry economists and commentators continued to misunderstand the complex data to confirm borrower overpayments.
The Bank confirmed to Mortgage Solutionsthe figures would be updated quarterly, but no longer sent to the press.
In a 2011 Q2 Quarterly Bulletin, economist Kate Reinold said: “The fall in the number of housing transactions is therefore likely to have been a key driver of the fall in equity withdrawal since the financial crisis. There is little sign that, at the aggregate level, households are making an active effort to pay down debt more quickly than in the past.”
In fact, the complex data also reflects factors like equity withdrawal through further advances, value boosts from DIY and the number of housing market transactions, however, ity does not reflect house price rises.
The BoE’s negative figure of -£8.6bn indicates a continued injection of housing equity by households overall, with remortgaging levels staying weaker than house purchase.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “In these uncertain economic times, it would make sense that homeowners overpay on their mortgages in order to reduce the balance more quickly, particularly if they have an interest-only mortgage, but this is not happening.
He added: “This is likely to be down to the rising cost of living and the fact that many households are struggling with costs, with few in a position to overpay on their mortgage.”
Chris Love, director of independent mortgage broker, Mortgage Simplicity, said: “It’s hard to take equity out of your home if you have none of it, or very little. Lender criteria just won’t allow it. Likewise, people are no longer moving home as much, which is a natural catalyst for equity withdrawal.
“Long gone are the days when your property was a cash machine. In five or six years, we have witnessed a phenomenal volte face.”
