In the not too distant past people had almost gotten used to the fact that their home was in great positive equity and were very much using that equity as part of their disposable income. Recent figures revealed at the G20 conference suggest that that attitude has now completely changed.
To give you a feel for how complete the turnaround is here are a few figures. In the final quarter of 2008 just over £8 billion pounds was repaid. Compare that to the figure of £1.8 billion in the second quarter of last year, the first quarter actually saw people withdrawing equity to the tune of 6.5 billion. Striking isn’t it?
People are clearly now seeing their home mortgage as a debt they want to be rid of as quickly as possible. Instead of ripping money out of their homes to fund their lifestyle they are now trying to put it back in. There is also the practical reality that in a lot of cases people find themselves in a position where there is no equity in their houses. They are left with little choice but to knuckle down to getting it paid off.
Whatever the thinking behind it it is clear that things have changed dramatically and all predictions indicate that this new attitude is likely to keep up for some time. An even bigger repayment figure is expected in the first quarter of 2009.
Some are suggesting that the property party is over.
