British people withdrew a record £13.3 billion from the value of their homes during the final quarter of 2002, according to new figures.

The sum was almost double the £7.59 billion people withdrew during the same period the previous year, the Bank of England said.

It was also an increase on the revised third quarter's figure of £10.7 billion, which was also a new record.

The figures confirmed people are increasingly cashing in on the housing boom by withdrawing money from their homes to finance large purchases or consolidate debt.

Under equity release schemes lenders allow homeowners to increase their mortgages in exchange for a cash lump sum if their property is worth more than the original sum they borrowed.

Simon Rubinsohn, chief economist at Gerrard, said: "One of the issues this raises is, if we were to get a fall in house prices, would it lead to people being in negative equity as in the Eighties.

"I would say no as the stock of equity withdrawn has been a lot less than during the Eighties."

Friday April 4 2003