27 Apr

Homeowners 'reducing mortgage debt'

Homeowners 'reducing mortgage debt'

Homeowners across the UK are reducing the amount of debt they have as a result of property purchases.

This is according to David Dooks, statistics director at the British Bankers' Association (BBA), who said that the base rate of interest has had a bearing on this trend.

The expert stated: "Low interest rates continue to influence customer behaviour. Homeowners are reducing mortgage debt by making, or maintaining, higher repayments using the extra cash generated by lower mortgage rates."

Currently, the base rate stands at 0.5 per cent, following the decision by the Bank of England's Monetary Policy Committee earlier this month to leave it at that level.

It is not expected to raise this until the economic recovery looks more certain.

Mr Dooks made his comments in the wake of the release of figures by the BBA, which showed that there was a 4.5 per cent annual rise in banks' net mortgage lending last month.

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