Mortgage equity withdrawal rises in Q3
Rising house prices encouraged homeowners to take more cash out of their homes in the third quarter than the second, Bank of England data showed on Friday.
Mortgage equity withdrawal rose to 11.8 billion pounds in the July to September period from a downwardly revised 11.0 billion pounds in the second.
This lifted it to 5.4 percent of post tax income from 5.1 percent in the second and a low of 3.1 percent in early 2005. Nevertheless, it remains well below peaks of around 9 percent of post tax income seen in 2003.
Rising house prices in recent years have encouraged the refinancing of home loans to free up cash for other spending.
"The significant pick up in mortgage equity withdrawal in the first three quarters of the year reflects increased confidence in the housing market," said Howard Archer, economist at Global Insight.
After slowing in 2005, house price inflation has gathered pace in recent months. A survey from the Nationwide building society this week showed annual house price inflation hit a two year high of 10.5 percent in December.
The British Bankers' Association reported earlier on Friday that mortgage approvals a forward looking indicator rose 9.1 percent in November from a year ago while new mortgage lending hit a record high of 6.7 billion pounds.
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