Homeowners pay down loans

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The Independent Online

Homeowners accelerated the rate at which they are paying down their mortgages during the second quarter, Bank of England figures showed yesterday. Borrowers reduced their outstanding mortgage debt by £6.19bn during the three months to the end of June – the ninth consecutive quarter to have seen a net injection of equity.

But this could prove to be bad news for the economy. The figures show that households spent the equivalent of 2.5 per cent of their post-tax income on reducing their mortgages. Economists gave warning that this is likely to weigh on consumer spending.