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Low interest rates and reduced levels of property transactions led to borrowers repaying a record net £9.1billion of mortgage debt during the second quarter of the year, the Bank of England has reported.

A sluggish housing market, low returns on savings and economic uncertainty have put people off taking their cash out of their homes.

It means that housing equity withdrawal being negative in every quarter since the spring of 2008.

The Bank of England confirmed that its latest data showed the highest negative figure since comparable records began in 1970.

Analysts said the record net injection of housing equity reflected peoples desire to improve their personal finances and cut their debt, against a background of high unemployment.

Low savings interest rates, as the Bank maintains its base rate at a historic 0.5 per cent low, have increased the attraction for many people to use any spare cash left over to reduce their mortgages.

The figures were released the day after the Chancellors Autumn Statement, which outlined a package of measures aimed at injecting life back into the housing market, including underwriting mortgages for first-time buyers purchasing new-build homes, to help them on to the housing ladder.

The Government also plans to reinvigorate the right to buy scheme, a policy strongly associated with former prime minister Margaret Thatcher in the 1980s.

But lenders and estate agents said ministers should have gone further by extending the current stamp duty holiday for first-time buyers, warning that withdrawing the concession in the spring will disrupt the already fragile housing market.

While peoples focus on paying down their debt may be more prudent than tapping into their housing wealth to supplement spending, it is more bad news for retailers as households budgets remain under pressure from high living costs.

Equity withdrawal accounted for 3.1% of peoples post-tax income during the second quarter of 2010, but during the second quarter of this year they spent the equivalent of 3.5% of their take-home pay on their mortgage.

With Christmas now behind us and many consumers looking to consolidate their debts, MoneySupermarket.com analysis shows that hundreds of pounds can be saved by moving to the best zero per cent credit card deals on the market.

Those unable to pay off their debt quickly and looking to spread the repayment costs over a period of time should ensure they have moved their outstanding credit card balance to a new zero per cent balance transfer card to potentially save hundreds of pounds in interest.

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Consumer debt saw its biggest growth in a decade in November, according to new data from the Federal Reserve, as consumers headed into the holidays ready to spend.

CONSUMER CREDIT CARD DEBT JUMPS IN NOVEMBER Americans’ credit card debt shot up by more than $5 billion in November — the third straight monthly increase and the biggest jump in four years. Still, credit card debt is far below record highs set a few years ago. The chart below graphs Americans’ credit card debt totals from their peak of $972.2 billion in September 2008 through November 2011, when it rose to $798 billion. Read full post…

Personal Bankruptcy and Its Effects

In recent times, personal bankruptcy has become more common with a myriad of reasons as to why this is including borrowing too much, failed businesses, bankruptcy before divorce and more. If you intent to file bankruptcy, it is best to know some bankruptcy information. These facts can help you to understand what happens when you claim to be bankrupt.

The first fact that you will need to understand is that filing for bankruptcy is not the end of the world. In fact, in certain situations , there may well be advantages of claiming bankruptcy.

Personal Bankruptcy is a way for you to suspend the different debt collections that are being carried out in your life during the time that you have somehow managed to collect lots of debts. Once Read full post…

Newlyweds are increasingly shunning the wedding list and asking for money as a wedding gift to put the cash towards a honeymoon. Research shows that 45% of couples would prefer guests to give them money, with 26% opting for vouchers towards a honeymoon.

It’s becoming a growing trend for couples to ask for money as a wedding gift. Since the recession, it has become more acceptable to ask for money, either to put towards the honeymoon, or towards a major purchase. In the past couples may have been embarrassed to ask, but during these credit-crunching times, wedding guests are happy to abandon tradition and offer gifts that are more practical to the newlyweds.

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Dear To Her Credit, My husband and I lived in California, which is a community property state, for 15 years. He had a lot more debt than I did, and most of it was in his name only.

Recently, we moved to Oregon, which is not a community property state. We’re now getting a divorce, and I’m trying to get all his debts assigned to him. I’ve heard, however, that by community property laws, I could still be liable for his debts even after the divorce and even if my name is not on the accounts.

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