According to the latest report by the Bank of England people in the UK are starting to take a more cautious approach to housing equity withdrawal (HEW) in Q3 2009. The statistics show that HEW has dramatically reduced by as much as £5 billion when compared to the previous quarter. In essence this means that mortgage owners have drastically decreased their loans in the three months between July and September. What perhaps is slightly more worrying is the fact that this is the 6th consecutive quarter in which home-owners were giving back more of their mortgage then they are taking. This could spell bad news for our recovering economy as Britain has traditionally relied on equity withdrawal to lift consumer spending.

These findings by the Bank of England are affirmed by a separate study conducted by the Equity Release Solicitors Alliance. They suggest that customers who are interested in equity release are taking a long time and investigating numerous alternatives before coming to any decisions. Their research, which surveyed 600 clients, found that 40% of respondents took over six months researching before even getting in touch with an IFA. Interestingly, a wide variety of channels were being used to gain information however the vast majority (83%) said they consulted guides to gain a better insight into equity release.

The survey certainly adds evidence of the growing cautiousness that we can see in the equity release market. With the height of housing withdrawal occurring in 2003 due to booming property prices, it is worth asking whether we will have to return to that state before people feel confident to withdraw equity in their homes?