More mortgages paid off

The negative figure implies that homeowners injected a net total of £8.1 billion into housing equity in the first quarter. That compares with a revised estimate of a net injection into housing equity of £7.8 billion in 2008 Q4.

Commenting on the Bank of England's housing equity withdrawals data, Simon Rubinsohn, RICS chief economist said: "Latest data from the Bank of England shows that housing equity withdrawals plunged again in the first quarter of the year. This is not a surprise given the fall in house prices over the period and will have contributed in no small way to the weakness in high street spending.

“There have been some tentative signs of a stabilisation in the property market but it is improbable that housing capital, in the near term, will be viewed as a source of wealth that can be drawn down by home owners to supplement their income. We expect consumer spending to remain relatively subdued over the remainder of this year."