Britons 'borrowing more' against their homes

As Britons’ house prices rise, they are borrowing more against the value of their property, according to new figures from the Bank of England.

Mortgage equity withdrawal, which is a loan guaranteed against a property, rose to £14.6 billion pounds in the final quarter of last year.

This figure is £2.4 billion more than the revised figure for the quarter had been.

Withdrawals, at their highest since 2004, equalled 6.7 per cent of post tax income.

Some of these withdrawals have been made with the intent of further increasing the value of property.

The Yorkshire Bank found that while 70 per cent of homeowners expect the value of their house to continue to increase over the next year, one third would redecorate their house in a bid to raise its price further before sale.

Of those, 14 per cent would re-mortgage or free up equity to make improvements.

Gary Lumby, head of retail at Yorkshire Bank said: "Some DIY projects, like fitting new kitchens and bathrooms or installing double glazing, can be costly.

"The sensible option for many could be to spread the cost of these projects by releasing equity and adding it on to the total mortgage repayments."