Mortgages debt tops £1 trillion

An extra £9.3bn was borrowed to buy homes in May, increasing outstanding mortgage debt to £1.007 trillion.

However, the value of unmortgaged property across the UK is much higher at about £3.6 trillion.

According to the Nationwide, the average house now costs nearly £166,000 with mortgage repayments absorbing 42% of average take home pay.

The BOE figures show that Britons have a further £192bn outstanding on credit cards and other loans, so total personal debt now amounts to £1.199 trillion.

It was in 2004 that all personal debt first went through the £1 trillion level.

But the continued buoyancy of the property market and the steady rise in house prices has driven up the amount of debt due to mortgages alone.

The Council of Mortgage Lenders (CML) pointed out that the figure for outstanding debt has also been pushed higher by the continuing spread of home ownership, which has gone up from 60% to 70% of the population during the past twenty years.