Equity release `declining in popularity`

8 January 2009

Consumers are not relying on equity release to the same extent as they were previously, it has been found.

According to Bank of England figures, a total of £5.7 billion was put back into properties in the third quarter of 2008.

This contrasts with the first quarter of the year, when households released £5.6 billion of equity.

It is thought that the statistics reflect the fact that homeowners are increasingly inclined to reduce the size of their debts in light of the current economic conditions.

"Not so long ago, an Englishman`s house wasn`t just his castle, it was his cash machine, too. This, very clearly, is no longer the case," commented Andrew Montlake, partner at Cobalt Capital.

Writing on Fool.co.uk recently, Jane Baker suggested that homeowners should overpay on their mortgages with any extra money they get as a result of falling interest rates as this will save them money in the long term in interest payments.

Tags: equity release, remortgage

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