Debt-fuelled splurge on the high street fading into a distant memory.

Businesses, the government and now households are all embarking on a prolonged period of deleveraging – economist speak for paying down debt.

Bank of England figures released on Monday show that in the fourth quarter of last year, British households injected £7 billion of equity into their homes – the highest quarterly figure since records began in 1970.


The net injection is caused by a combination of a lower than usual number of approved new mortgages and higher deposits for those that were approved, fewer equity release mortgages and people paying more than their normal monthly repayments as they take advantage of low interest rates.

In the boom years of 2000-2007, UK households treated the equity in their houses as an ever-growing well of money that could be drawn on to repay unsecured debt or pay for big ticket items.

At the height of the practice in 2003, £17 billion of equity was withdrawn by UK households – much of it used to finance a period of sustained high street spending that UK retailers can only dream of returning.


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