Withdrawal of equity from homes rising again

People took more equity out of their homes in the fourth quarter of 2005 than at any time for a year, Bank of England figures show.

Mortgage equity withdrawal was £11.8bn in the period against £8bn in the previous three months. The new figure is equivalent to 5.6% of post-tax incomes, up from 4.2%.

Economists said the jump was consistent with a rise in mortgage lending and house prices in the period but there was little sign the cash was being spent rather than saved. One said the figures could be swollen by people inheriting houses, selling them, and banking the cash.