BRITONS borrowed a record £13.5bn against the value of their homes during the first three months of the year, it emerged yesterday.

The sum compares with the £8.05bn withdrawn during the same period a year earlier, the Bank of England said.

It was also an increase on the previous quarter's revised figure of £12.66bn.

The data provides further proof Britons are increasingly prepared to cash 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. Historically, low interest rates and double-digit house price inflation have led to a steep increase in equity withdrawal in the past couple of years.

During the latest three-month period, money withdrawn from properties represented 7.3 per cent of people's post-tax income, although this was still below the peak of 7.6 per cent in the late 1980s.

Simon Rubinsohn, economist at fund manager Gerrard's, forecast that mortgage equity withdrawal across the whole year was likely to total £50bn compared to about £40bn in 2002.

He said: "2003 is likely to be the peak year for mortgage equity withdrawal, with the downturn in house price inflation beginning to have a more marked impact on the capacity of homeowners to withdraw capital from their properties in 2004."