UK mortgage debt softens by another 8.6 billion

Britain's mortgage burden lightened by another £8.6 billion between July and September, official figures revealed.

An explosion in lending had come with a decade-long housing boom with people re-mortgaging to spruce up their homes or fund big purchases. However, since the downturn, many mortgage borrowers are using whatever cash they can part with to reduce what they owe.

However, according to the Bank of England, the biggest reason for the latest drop is a slump in mortgage lending.

Yesterday's figures meant the British had repaid around £100 billion over what they borrowed after the trend set in during the second quarter of 2008.

According to The Council of Mortgage Lenders, transactions could fall to their lowest level since it started keeping records in 1978.

Housing equity withdrawal had continued to remain negative through all quarters since Spring 2008, reflecting the continued mood of caution.

House prices across the UK rule at around 10 per cent below their peak levels, a separate report released today by housing information website, Nationwide, said. However, volatile regional variations reflected why many people had put off the idea of taking out a new mortgage.