Britons were less inclined to use savings to pay down mortgage debt in the third quarter, data showed on Monday, adding to signs of improving consumer confidence as house prices rise and the job market recovers.Homeowners put 10.4 billion pounds of equity into their homes in the quarter, the Bank of England figures showed - more than two billion pounds less than in the previous quarter and the lowest since the fourth quarter of 2009.Britons have paid down their mortgages on a net basis for the past four years, reversing the trend towards higher debt levels that dominated from late 1999 until the financial crisis.
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Borrowing against the rising value of property was a key driver of the consumer boom of the last decade, and while the Bank of England may welcome a return of that "feelgood" factor, it will be wary of a recovery that is heavily reliant on household spending and cheap credit.
Data earlier this month showed households saved just 5.4 percent of their disposable income in the third quarter, down from 6.2 percent in the second. Household spending, meanwhile, rose an annual 2.5 percent, faster than growth in the economy overall.
Keeping property price gains in check without crimping growth in the rest of the economy is shaping up to be the biggest challenge facing the central bank in 2014.
While inflation in the broader economy has come within a whisker of the BoE's 2 percent target, house prices are rising six times as fast in the capital and almost four times as fast nationwide.
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