Homeowners reduced their outstanding mortgage debt by the lowest level in a year in the first quarter of 2011, figures showed today.
Homeowners paid £5.8 billion off their mortgages, which was down on the record £7.1 billion the previous quarter, according to the Bank of England.
Householders have now been paying down their average mortgage debt for three years in a row.
There has been a shift towards homeowners paying off their mortgages since the financial crisis, whereas previously there was a willingness to take out loans as property prices soared.
The Bank said there is little evidence that homeowners are making an effort to pay down debt more quickly than in the past. Instead, the figures reflect the smaller number of house sales in the market.
Housing equity injections were last lower in the first quarter of 2010 when they sunk to £5 billion.
But the latest figures still showed that householders were keen to pay off their debts amid the financial uncertainty, said analysts.
While people felt confident about increasing the size of their mortgage debt or taking on a new mortgage when house prices were booming, they are far less inclined to do so when they are falling and unemployment is rising.
Howard Archer, chief UK and European economist at IHS Global Insight, said persistent, tight credit conditions have made it more difficult for many people to obtain mortgages to withdraw housing equity.
He said: "The ongoing, appreciable net injection of housing equity in the first quarter highlights the strong desire and perceived need of many people to improve their personal financial balance sheets given high debt levels and serious concerns and uncertainties over the economic situation."
He added: "Meanwhile, the overall marked softening in house prices from their late-2007 peak levels has made housing equity withdrawal less attractive."
He added that the trend of people paying off their mortgages is adding to the constraints on consumer spending, which has been propped up by housing equity withdrawals in recent years.Reuse content