According to house equity withdrawal (HEW) data released by the bank of England on Wednesday, households are paying back a record amount on their mortgage.

During the second quarter of 2011 alone, consumers paid back £9.1bn on their mortgages, amounting to 3.5% (-3.5% of HEW) of their post-tax income. This is the largest figure ever paid back in a three-month period since the Bank of England started collecting data.

To put these figures in perspective; in late 2006, house equity withdrawal had peaked at 5.6% of post-tax income, as compared to -3.5% from April to June of 2011. Simply put, house owners were remortgaging their properties a lot more before the recession.

Today, as home owners are cutting back on spending and house prices continue to fall, remortgaging does not have the appeal it had during the “boom” years. Since June of 2008 a grand total of £92.9bn has been paid back instead of being spent by home owners.

An article by Kate Reinold of the Bank’s structural economic analysis division (.pdf, 70 MB) published with the 2011 Q2 Quarterly Bulletin explained that the fall in HEW since the recession is “likely to reflect a fall in the number of housing transactions, with little sign that households in aggregate are making an active effort to pay down debt more quickly than in the past.”

IHS expert Howard Archer said: “The record net injection of housing equity in the second quarter points to a strong desire and perceived need of many people to improve their personal financial balance sheets given high debt levels and serious concerns over the economic situation and jobs.”

“Furthermore, extremely low savings interest rates have made it much more attractive for many people to use any spare funds that they have to reduce their mortgages. In particular, many people may be using the extra money that is resulting from their very low mortgage interest payments to reduce the balance that they still owe on their houses.”