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UK homeowners looking to reduce mortgage liabilities

During the period between April 2010 and June 2010 the Bank of England revealed that UK homeowners repaid £6.2 billion of outstanding mortgage liabilities. This is the largest injection of cash back into the UK mortgage arena since the first quarter of 2009 and would seem to indicate that UK taxpayers are more concerned with repaying their debts at the moment than taking out further liquidity. So why are UK taxpayers turning ultra-cautious?

There are fears that as the UK economy struggles we will see the criteria for UK mortgages tightened and we could see the UK employment market come under significant pressure. As a consequence, many in the UK are now looking to repay as much of their outstanding mortgages as possible to take pressure off as and when the economic downturn occurs. However, the fact is that many people may live to regret this short-term injection of capital back into the mortgage market because ultimately if they do struggle in the weeks and months ahead it is unlikely they will be able to dip back into their mortgage pot.

While many people are unwilling to admit potential problems for the UK economy in the short to medium term, the signals are that everybody from the Bank of England to mortgage providers, from taxpayers to business leaders are looking to batten down the hatches for what could be a stormy time in the short to medium term.

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